Antonio E.

Weiss

Management
Consultancy and the
British State
A Historical Analysis
Since 1960
 Management Consultancy and the British State

“Antonio Weiss’ new book fills an important and intriguing gap in the literature. It
also helps us to answer a vital question: how was it that management consultancies
came to wield such influence across British government—from transport to health
care, and from education to the very organisation of central and local government
themselves? Using newly-released or discovered archival papers from the industry
itself, from government, individuals and political parties, he shows that their ability
to move across and around the vague borders between the British state and the world
of private advice were absolutely central to their relative success. Given this inter-
disciplinary approach, this book should be of interest and use to historians, political
scientists, sociologists, public policy experts and practitioners alike.”
—Glen O’Hara, Professor of Modern and Contemporary
History, Oxford Brookes University, UK
 Antonio E. Weiss

Management
Consultancy and the
British State
A Historical Analysis Since 1960
Antonio E. Weiss
London, UK

ISBN 978-3-319-99875-6    ISBN 978-3-319-99876-3 (eBook)

https://doi.org/10.1007/978-3-319-99876-3

Library of Congress Control Number: 2018958004

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 Acknowledgements

I owe a huge debt of gratitude to the Department of History, Classics and

Archaeology at Birkbeck, University of London, not only for being an excep-
tional institution in which to learn and study, but also for granting me an Arts
and Humanities Research Council Award for the research which forms this
book. I am also indebted to the Eric Hobsbawm Scholarship Fund, whose
generosity enabled my research to take a much broader geographical focus
when consulting archives. My supervisor at Birkbeck, Frank Trentmann, was
unstintingly helpful, insightful, supportive, and accessible throughout. I am
also grateful to the support and advice of Jon Lawrence, for earlier research on
this topic conducted whilst at the University of Cambridge. Glen O’Hara’s
comments, feedback, and encouragement have been greatly appreciated, and
made this a better text. Jacqueline Young and Marcus Ballenger have been
superb throughout the commissioning and editing process. On a personal
note, I would like to thank Sir Alcon Copisarow for his inspiration, Carol for
her support, and Amber for always keeping me company.
I have had the privilege—and faced the challenges—of writing a history of
a period and topic through which I have lived and experienced. Since 2008, I
have worked as a management consultant to UK public services, and since
2014 I have served as an elected local government councillor in a London
borough. This book is consciously not self-ethnographic in any way, yet I am
aware these positions, rightly, mean the onus on impartiality and risk for
potential biases are even greater in this research. I have sought to mitigate this
risk throughout. With this in mind I lay open my work to critical review and
discussion, and hope—in some small way—it helps to further our under-
standing of both management consultancy and the postwar British state.

v
 Contents

1 Introduction   1
Bringing the Consultants (Back) In    3
States and State Power   11
Unlikely Guests  16
A Heterogeneous Global Industry   21
Definitions and Frameworks   25
Structure of the Book   29
Methods and Sources   32

2 Planning, 1960s–1970s  49
Scientific Management and the Emergence of Management
Consulting in Britain   50
The Rise of the British Generation   56
Putting Planning in the State   60
Distrust of the Civil Service   68
The Management Consultant’s Lament   78
Reviving British Industry   82
The Decline of the Big Four   85

3 Reorganising, 1970s: The 1974 National Health Service

Reorganisation and McKinsey & Company  97
The Arrival of the Americans   99
American “Know-How”  101
Friends in High Places  104
Case Study: The 1974 NHS Reorganisation  107

vii
viii Contents

4 Automating, 1980s: Arthur Andersen and the Operational

Strategy 149
The Accounting Generation Emerges  151
Losing the Lead in Computerisation  160
Case Study: The Operational Strategy  164
Chronology of the Operational Strategy  167
Chalk and Cheese  176
The Turn from Full Employment  181
The Hybrid State in Action  185
Impact on the State  187

5 Delivering, 1990s–2000s 199
The International Political Economy of State Reform  203
In Search of the Reinvention of Government  206
The Rise of Outsourcing  209
The Prime Minister’s Delivery Unit  220
Retrenchment and Consolidation  230
The Competencies of the Modern State  234

6 Conclusions 249
The Governmental Sphere and the Hybrid State  250
Power, Consultants, Politicians, and Sir Humphrey  254
The Future of the History of Consultancy and the State  263

Appendix 1: Key Characters by Chapter 269


Appendix 2: Detailed Selection of Consultancy Assignments
by Generation 279

Bibliography 313

Index 349
 List of Figures

Fig. 1.1 Total estimated UK public sector expenditure on management

consultancy, 1963–2013. (Compiled, collated, and analysed by the
author. Pre-1979 figures based on company returns in MCA
archives. Boxes 22, 23, and 24. Post-1979 all “public sector” work
was recorded as such by MCA firms. Post-1979 figures from MCA
annual reports. RPI inflator figures from Office of National
Statistics. Estimates of MCA returns as a proportion of total UK
consultancy market from MCA Annual Reports. Assumptions used
in calculations: (i) all public sector work equates to work recorded
under Board of Trade classification of “Public administration and
defence,” “Local government,” “Government department,” and
“Miscellaneous (other public sector) services” work; and (ii) where
total industry estimates are made, public-private sector split of
work undertaken by non-MCA firms is assumed to be the same as
for all MCA member firms. MCA annual company returns do not
classify nationalised industries as “public sector” work, meaning
work in these industries is likely to be understated.) 4
Fig. 2.1 The origins of the Big Four. (Dates and connections derived from
Kipping, “American Management Consulting Companies”,
201–203)53
Fig. 2.2 The growth of the technical class. (Data from Guy Routh,
Occupation and Pay in Great Britain 1906–60 (Cambridge:
Cambridge University Press, 1965), 15. Notes on data: (1) includes
surveyors, architects and ship-designers; (2) includes statisticians
and economists; (3) includes editors and journalists; (4) commis-
sioned officers) 81

ix
x  List of Figures

Fig. 2.3 The rise of managers in Britain. (Data from J. F. Wilson and A. W.
J. Thomson, The Making of Modern Management (Oxford: Oxford
University Press, 2006), 18) 81
Fig. 3.1 The “tripartite” structure of the National Health Service in England
and Wales, 1948. (Adapted from Webster, The National Health
Service: A Political History, 21) 98
Fig. 3.2 McKinsey study team work plan. (TNA: MH 159/384. “Meetings
of Steering Committee.” November 11, 1971) 115
Fig.3.3 The reorganised National Health Service in England, 1974.
(Adapted from Hunter, “Organising for Health: The National
Health Service in the United Kingdom”, 108) 117
Fig. 3.4 The National Health Service in England, 1997. (Department of
Health, Departmental Report (London: The Stationery Office,
1997), Annex E) 118
Fig. 4.1 DHSS expenditure on social security benefits, 1982–1983. (CAB
129/215/3, “Public Expenditure: Objectives for 1982 Survey,”
Memo by Chief Secretary, Treasury, July 8, 1982, 122–123) 150
Fig. 4.2 “For the Man Who Has Everything…the Fabulous Desiccated
Calculating Machine.” (©British Cartoon Archive, University of
Kent, Arthur Horner, New Statesman, December 17, 1979.
Reproduced with the kind permission of the estate of Arthur
Horner)161
Fig. 4.3 IT services by MCA member firms, 1973–1996 (selected years).
(Author calculations from MCA annual reports) 164
Fig. 4.4 Social security organisational structure and staff numbers, October
1981. (Derived from Geoffrey Otton, “Managing social security:
Government as big business”, International Social Security Review
27, no. 2, (1984): 165–168) 169
Fig. 4.5 Existing and proposed computer structure for the Operational
Strategy. (Derived from Social Security Operational Strategy: A brief
guide (London: DHSS, 1982), 9–11) 171
Fig. 4.6 Unemployment rates and percentage of the population below 60
per cent median income, 1976–2009. (Author analysis based on
figures from Institute of Fiscal Studies (from which the proportion
of the population earning under 60 per cent median income is
used as a proxy indicator for poverty levels) with data from HM
Treasury and Office of National Statistics (for unemployment
rates))182
Fig. 4.7 UK benefits expenditure (£m), real terms at 2014/2015 constant
prices. (Author analysis based on data from the Department of
Work and Pensions, last accessed on April 3, 2014, data.gov.uk)183
   List of Figures  xi

Fig. 5.1 Growth of Capita. (Adapted from NAO, Delivery of public services,
26. Capita revenues before 2004 are for all income, as it did not
have significant non-UK operations in this period) 211
Fig. 6.1 The “governmental sphere” and forces of influence 251
Fig. 6.2 Bodies of the state and how consultants have changed its powers 259
Fig. 6.3 The composition of the British state. (Based on author analysis
from Office for National Statistics, “Public Sector Employment.”
Accessed August 18, 2015, http://www.ons.gov.uk/ons/rel/pse/
public-sector-employment/q1-2015/tsd-pse-series.html)260
Fig. 6.4 State and non-state use of consultants. (MCA data from MCA
archives and annual reports. “GDP data” from Office for Budget
Responsibility, accessed August 9, 2015, budgetresponsibility.org.
uk/pubs/PSF_aggregates_databank_Summer-Budget-20151.xls)262
 List of Tables

Table 1.1 Five generations of management consultancy firms in Britain 27

Table 2.1 Income of the Big Four 56
Table 2.2 Big Four company revenue split by service line as a % of MCA
total (UK only), 1967 61
Table 2.3 Big Four company revenue split by service line as a % of MCA
total (UK only), 1974 62
Table 2.4 “Blocks” of work by Management Consultancy Group 73
Table 3.1 Management consultancy fees, 1971 122
Table 4.1 DHSS expenditure on social security benefits and claimant
numbers, 1982–1983 152
Table 4.2 Income of the Big Eight 153
Table 4.3 Big Eight companies’ revenue split by service line as a % of MCA
total (UK only), 1974 154
Table 4.4 Impact of the Operational Strategy on typologies of state power 187
Table 5.1 State work income for MCA members 200
Table 5.2 Four largest outsourcing service providers in the UK public
sector, 2013 210
Table 5.3 Public sector MCA service line consulting 211
Table 5.4 Prime Minister’s Delivery Unit priorities, 2001 224
Table 5.5 Departmental expenditure on consultants (£m), 1998–2003 225
Table 6.1 Selection of state consulting assignments of all generations, 2010s 257
Table A.1 Detailed selection of state consultancy assignments by British
generation firms, 1920s–1980s 280
Table A.2 Detailed selection of state consultancy assignments by American
generation firms, 1960s–1970s 293

xiii
xiv  List of Tables

Table A.3 Detailed selection of state consultancy assignments by

consultancy firms of accountancy generation, 1970s–1990s 297
Table A.4 Detailed selection of state consultancy assignments by data
processing generation 310
 1
Introduction

In May 1940, Colonel Lyndall Urwick, founder of the British management

consultancy Urwick, Orr & Partners, was asked by Sir Horace Wilson,
Permanent Secretary of the Treasury, to join a cross-departmental team aim-
ing to improve administrative and clerical productivity in government depart-
ments. Urwick readily accepted the offer, convinced that better management
would improve efficiency in the civil service.1 Yet within two years Urwick
had departed, bemoaning that:

In Whitehall, even in wartime, the fact that I was Chairman of an up-and-­

coming management consultancy company gave me no status at all, but was in
fact a handicap, a kind of certificate of freakishness, was a shock from which I
never entirely recovered as long as the 1939–1945 war was on.2

By 2010, the experiences of Urwick reflected a bygone era. In 2009, the

Management Consultancies Association (MCA) (a UK-based trade association)
proclaimed “the public sector’s use of consultants has long been…on a growth
path because of the changing nature of public services and the growing demands
[from] all parts of government.”3 In 2006, the National Audit Office (NAO)
estimated public sector expenditure on consultants to be £2.8 billion.4 (By com-
parison, this was roughly equivalent to the high-profile unemployment benefit
Jobseeker’s Allowance.)5 Remarking on these figures, the House of Commons
Committee of Public Accounts declared: “Consultants, when used appropri-
ately, can provide considerable benefits for clients. There are examples where
consultants have added real value to departments and enabled them to make
improvements they would not have achieved ­otherwise.”6 In 1942 Urwick left

© The Author(s) 2019 1

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3_1
2  A. E. Weiss

frustrated and convinced that the Treasury needed to pay “more attention to
modern methods of management” and that the views of consultants were not
valued by the civil service.7 By the early 2000s, clearly something profound had
changed in the British state’s relationship with management consultants. This
book explains this change.
Three issues are covered in this book, each addressing important questions
in the fields of modern British history, political science, and business history,
respectively. First, why were management consultants brought into the
machinery of the state? Broadly speaking, consultants are hired by clients to
solve problems which clients lack either the capability or capacity (or both) to
address with internal resources. This begs certain questions. As the postwar
state increased in size, why did it not create the internal capability to fulfil the
functions and services which consultants undertook? Given the assumed hos-
tility to outsiders that some histories of the British state posit, why would
state agents look to non-state agents for help?8 It is widely accepted that
consultant-­client relationships are predicated on trust.9 If so, how did these
outside actors gain this trust? Growth in the use of consultants cannot be
explained merely by the expansion of the state. From the mid-1960s to mid-­
2000s, the amount spent on management consultants by the state far out-
stripped growth of the state: spend on public sector consultancy as a proportion
of total public sector expenditure increased by a factor of 70.10 These ques-
tions play directly into major historiographical debates regarding the British
state. The answers derived seek to further a “revisionist” view of the state as
much more expert and open to external ideas and expertise than some previ-
ous historians assumed.
Second, how has state power been impacted by bringing profit-seeking
actors into the machinery of the state? This question raises further investiga-
tions into the British state. For example, what exactly is the British state and
what power does it have? Where does this power lie, both institutionally and
geographically? In which parts of the British state have consultants worked?
And how have politicians and civil servants reacted to their work? Politicians,
the media, political scientists, and others have suggested that putting non-­
state actors with their own interests into the heart of state functions have led
to an attenuation of the state’s powers.11 This book considers the accuracy of
these claims and aims to further our understanding of the nature of state
power in Britain, contributing to contemporary debates amongst political sci-
entists concerned with the scale, scope, and powers of the state.
Third, how has the nature of management consultancy changed over time?
Consultancy has attained a high status in various fields. The 55,000 consultants
currently working in Britain are deemed part of a “new elite” in society.12
  Introduction  3

Academic studies on consultancy have increased significantly in recent years.13

Considerable media attention is devoted to what consultants do or what they
think.14 Yet management consultancy itself remains a poorly understood indus-
try. Unlike law or accounting, there are no formal professional qualifications
required to be a management consultant. And the type of work consultancies
undertake has varied enormously over time. This makes it important to ques-
tion whether it is meaningful to speak of a coherent “management consultancy”
industry at all. The answer to this has important ramifications for the emerging
academic literature—especially that by business historians and sociologists—on
“management consultancy.”

Bringing the Consultants (Back) In

Since Urwick left Whitehall, consultants have permeated all parts of the
public sector, advising august bodies such as the National Health Service
(NHS), Bank of England, British Rail, as well as every central government
department and most likely every local authority in Britain.15 The nature of
the British state has changed dramatically too: the size of the state (as a pro-
portion of gross domestic product) expanded significantly, nearly doubling
from 25 per cent to over 45 per cent from 1940 to 2000. At the same time,
state expenditure moved away from high levels of warfare expenditure towards
greater levels of welfare expenditure.16
As Fig. 1.1 demonstrates, since the mid-1960s—when the use of consul-
tants became formalised and encouraged across central government
departments—there has been widespread procurement of management con-
sultants by the British state. Unsurprisingly therefore, though seldom
noted, consultants have played an important role in changes in the British
state. For example, in the 1950s, in the early years of the postwar state, British
consultants advised on more efficient use of utilities and cleaning practices in
hospitals for the Ministry of Health.17 Throughout the 1980s, Arthur
Andersen played a pivotal role in the largest civil computerisation project
outside the United States—the “Operational Strategy”—which automated
benefits payments, fundamentally changing how the British state engaged
with its citizens.18 In 1992, the consultants McKinsey & Company assisted
the British Transport Commission’s “privatisation strategy” of the railway sys-
tem.19 And in the 2000s, Accenture, McKinsey, and other consultancies
staffed, alongside civil servants, Tony Blair’s Delivery Unit which was instru-
mental in the implementation of New Labour’s public sector reform agenda.
The unit consciously partnered state and non-state actors in the management
of public services.20
 4  A. E. Weiss

5000 0.008
Consultancy income for public sector work (£m), 2013 constant prices

Public sector consultancy spend as a proportion of total public

Public sector consultancy as % of public sector spend
4500
Expenditure on consultancy (£m, 2013 constant prices)

0.007

4000
0.006
3500

0.005
3000

expenditure(%)
2500 0.004

2000
0.003

1500
0.002
1000

0.001
500

0
1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Fig. 1.1  Total estimated UK public sector expenditure on management consultancy,

1963–2013. (Compiled, collated, and analysed by the author. Pre-1979 figures based on
company returns in MCA archives. Boxes 22, 23, and 24. Post-1979 all “public sector”
work was recorded as such by MCA firms. Post-1979 figures from MCA annual reports.
RPI inflator figures from Office of National Statistics. Estimates of MCA returns as a
proportion of total UK consultancy market from MCA Annual Reports. Assumptions
used in calculations: (i) all public sector work equates to work recorded under Board of
Trade classification of “Public administration and defence,” “Local government,”
“Government department,” and “Miscellaneous (other public sector) services” work;
and (ii) where total industry estimates are made, public-private sector split of work
undertaken by non-MCA firms is assumed to be the same as for all MCA member firms.
MCA annual company returns do not classify nationalised industries as “public sector”
work, meaning work in these industries is likely to be understated.)

One of the most remarkable changes in the British state over the past 30
years has been the emergence of third-party “outsourcing” providers under-
taking hitherto state functions. From information technology services in gov-
ernment departments and local authorities to the operations of prisons and
hospitals, the running of large parts of the public sector has been taken over
by private sector agents.21 In 2013, the NAO estimated that £187 billion
per annum of public sector goods and services was “contracted out” by the
state on “back-office” and “front-line” services.22 Whilst management consul-
tants have seldom engaged in the direct delivery of these services, they have
indirectly played an influential role. For instance, in 2009 McKinsey advised
the Department of Health that NHS hospitals could save money through
outsourcing purchasing of drug supplies.23 And the British firm Capita, which
in 2012–2013 generated over £1 billion income through a variety of out-
sourced services for state clients, began its existence as a consultancy before
branching out into service provision.24 As such, the development of outsourc-
ing is also considered here and raises important further questions about the
  Introduction  5

British state. For example, if a state service is not provided by state actors, is it
still part of the state? Who ultimately wields power over these services? And
does this outsourced delivery of public services mark a historical discontinu-
ity, or does the history of the British state suggest the use of third parties is the
norm?
The manner and extent to which the postwar British state, used, viewed,
and engaged with outside experts such as consultancies is thus a key focus for
this book. Historical accounts—not all from historians; some from journalists
and political scientists—on the topic have broadly fallen into two camps:
what I term the “declinists” and the “revisionists.”
Of the former camp, writing in 1962 amidst a growing anxiety of perceived
British decline, the Observer journalist Anthony Sampson’s Anatomy of Britain
painted an influential picture of the amateurism and insularity of the civil ser-
vice. For Sampson, “of all the world’s bureaucracies, the British civil servants
are perhaps the most compact and self-contained. Their values and opinions
are little affected by the press and the public.”25 Taking aim at specific minis-
tries, Sampson noted how “the Ministry of Aviation is run by Latin and History
scholars, headed in an unscientific manner.”26 This image of insular amateur-
ism amongst the civil service—which Sampson appeared to only have interest
in describing the upper echelons of—is perpetuated during Sampson’s sporadic
updates of the Anatomy series. The 1982 edition continued to bemoan the civil
service’s amateurism, unaccountability, and lack of understanding of industry
and technology, despite attempts by the Fulton Committee to reform the civil
service.27 By 2004, Sampson noted that there had been a greater influx of out-
side influence in the post-Thatcher period in Whitehall, observing how “many
outsiders find it harder to see the difference between top civil servants and
businessmen in Whitehall, as the mandarins become more mixed up with cor-
porate executives.”28 Yet, when turning to specifics, Sampson’s charge of ama-
teurism returned, describing how “many people were surprised how naïve the
Treasury could seem, when faced with the more unscrupulous salesmen whose
chief objective was to make a quick killing and take government for a ride…
The Treasury was so eager to adopt the methods of businessmen that it seemed
to forget its duty to control them.”29
The American political scientists Hugh Heclo and Aaron Wildavsky refined,
but largely upheld, this image of insular generalists in their 1974 study of
public expenditure processes. Analysing the role of the Treasury in the Public
Expenditure Survey system, the pair described the “government community
as…[one in which]…few people are directly involved” and one where “the
office of one’s opposite number is probably only a few minutes away. Lunch
can be taken within five hundred yards at one of the Clubs in Pall Mall.”30
6  A. E. Weiss

Those frequenting such lunches were described as “the good Treasury man […
who…] is an able amateur.” Whilst Heclo and Wildavsky’s attention again
focused only on the upper class of administrative civil servants, they did,
unlike Sampson, shed more light on relationships with outsiders.31 Detailing
Treasury reactions to specialist advice in forecasting, the political scientists
noted how one Treasury figure “mistrusts technical professionals…and over
the years [the Treasury] has come to apply a discount factor to all technical
advice [the Treasury] is given.”32 The authors alluded to, but did not expand
greatly upon, the role of “interest groups…[who] are not outside the corridors
of power, merely difficult to hear as they glide effortlessly into their places as
unofficial appendages of government…the crucial fact about all this is that
British political administrators invariably know or know about each other.”33
For Heclo and Wildavsky, whilst the administrative classes in the civil service
exuded suspicion towards external expertise, there was a role for it, albeit a
role within closed networks.
The work of Sampson, Heclo, and Wildavsky had a huge impact on the
writings of Peter Hennessy, who has arguably had the greatest influence on
popular understandings of the modern British state.34 Writing in 1989,
Hennessy described the history of Whitehall as “a story of the permanent
government’s [the civil service] attempt to combat economic decline.”35 With
regard to economic decline, Hennessy was influenced by the works of Martin
Wiener and Correlli Barnett; the former attacked the British state’s failure to
revive an “industrial spirit” in the country; the latter attacked the “British
governing classes’” purported irresponsibility in fostering low-productivity
industries and over-reach in the realisation of the Beveridge Report’s welfare
state.36 In both histories, the state is portrayed as woefully amateurish in its
attempts to combat economic decline. Hennessy implicitly agrees with this
critique, announcing at the start of Whitehall that the “machinery of govern-
ment does matter, and its reform is an indispensable part of any strategy for
bringing about an historic and lasting transformation in Britain’s condition
and prospects” and at the end of his work declaring that Whitehall (used here
as a misleading proxy for the civil service) had contributed nothing positive to
Britain’s economic performance.37 Though Hennessy’s history celebrates many
great and eccentric figures within Whitehall, the civil service he describes is a
narrow one; his focus is almost exclusively on the administrative class, as
opposed to the executive or clerical classes, or indeed industrial civil servants.
Hennessy describes the many outside experts who supported the civil service
in the Second World War, but laments as “probably the greatest lost opportu-
nity in the history of British public administration” the supposed failure to
retain these outsiders after the war.38 Hennessy devotes time to the advisory
  Introduction  7

committees, the “great and good” and “auxiliaries” who frequently advised the
civil service from the scientific, economic, business, and many other back-
grounds; indeed, Hennessy notes a grand total of 606 Royal Commissions
and Committees of Inquiry taking place over the period 1945 to 1985.39 And
so he acknowledges the role of outsiders; but nonetheless the overall conclu-
sion is of a civil service focused on “failure avoidance,” “self-regulation,” lack-
ing in managerialism and lacking in scientific and technical expertise.40 This
latter point is curious, as though Hennessy noted that the Ministry of Defence
in 1987 “ties up a significant proportion of the nation’s best scientific and
technological brainpower” and that 105,593 civil servants were “industrial
officials” (of whom he noted “nearly 30,000 were craftsmen of various kinds”),
Hennessy, however, does not pursue any further the enquiry of what this
“brainpower” or what these “industrial officials” were actually doing.41
For these “declinists,” the picture of the civil service was a simple, and
damning, one: the civil service was the administrative class; it was amateur
and generalist in nature, maybe not always deaf to external expertise but cer-
tainly wary of it; its networks were largely closed and elitist, and were over-
whelmingly centred on the small geographic patch of the streets of Whitehall
and Pall Mall in London; and, most damningly, this civil service was guilty of
a significant contribution—possibly even the significant contribution—to
Britain’s postwar economic decline.
Over the past 20 years a body of work has emerged which firmly challenges
these views, from a group I term here the “revisionist” historians. In 2000, Jim
Tomlinson’s The Politics of Decline, though not explicitly absolving the civil
service of responsibility for Britain’s perceived ails, noted how in the postwar
period “the public schools and Oxbridge, and the institutions they peopled
such as the civil service and the BBC were the major villains of the piece [views
on decline].”42 By showing how the concept of British decline was a created,
politicised, and contested topic, one of the major tenets of the “declinists’”
view—that the civil service was actively complicit in decline—was severely
challenged. Hugh Pemberton’s 2004 Policy Learning and British Governance in
the 1960s took a different view, which further cracked the foundations of the
“declinists.” Through analysing the policy change caused by the Conservatives’
quest for higher economic growth in 1961, following the “Great Reappraisal”
of 1960–1961, Pemberton demonstrated the porous nature of policy circles in
Britain. By tracing changes to incomes policy, industrial training, and taxation,
Pemberton showed the role external economic advisers such as Nicholas
Kaldor, Roy Harrod, financial journalists, industrialists, and bodies such as the
National Institute of Economic and Social Researchers played in policy forma-
tion.43 Not only did Pemberton demonstrate the receptiveness of politicians
8  A. E. Weiss

and civil servants to outside expertise, he also firmly challenged the Westminster-
centric model of the British state, instead claiming that the “fragmented, disag-
gregated and beset by internal and external interdependencies” model of
governance in Britain was too weak to successfully enact lasting policy change
in his areas of concern.44
David Edgerton’s 2006 Warfare State, building on earlier research he had
undertaken since the 1990s, focused on the role of external as well as internal
experts in the British state during the period 1920–1970. For Edgerton, the
view of the “declinists” was inadequate, as “the pre-war state was expert and
the post-war state was even more expert, despite the image of dominance by
non-expert administrators.”45 Like Tomlinson, Edgerton viewed the “techno-
cratic critique” of the civil service (and its complicity in decline) as a historical
fiction, created for political or social ends.46 In Edgerton’s analysis, previous
understandings of the British state had failed to appreciate that postwar
Britain was not a “welfare state,” rather that it was a “warfare and welfare
state”; one that employed scientific and technical specialists and experts “at
many different levels, and in very significant numbers.”47 This “warfare state”
had, in part, been missed because “historians have tended to underestimate
the role of state enterprise simply because the vast majority of studies of the
state include tables which exclude ‘industrial’ civil servants” (see Hennessy
above, for instance).48 The state which emerged from this view was not just
the Whitehall civil service. To truly understand its nature required an appre-
ciation of the much larger “supply ministries” such as the Ministry of Supply
(MoS), Ministry of Aviation, or Admiralty; this state was non-London-­centric,
non-generalist, and non-amateur in nature. This state was much bigger and
complex. It was receptive to outside expertise as well as internal expertise from
specialists and professionals—those outside of the administrative class. And it
was a state which engaged deeply and widely with the private sector; especially
in the arms industry, where large state bodies were either run or contracted-
out to non-state bodies.
Glen O’Hara’s 2007 From Dreams to Disillusionment, covering similar
chronological ground to Pemberton, resurrected the ideology of “planning”
and its role in British policy-makers’ quest for economic growth in the early
1960s. The popularity of “planning” in everything from expenditure planning,
housing, regional planning, and healthcare necessitated outside advisers. In the
Department for Economic Affairs, for instance, O’Hara demonstrated the cen-
tral role external advisers such as Fred Catherwood, Robert Neild, and Samuel
Brittan played.49 Four years later, in Paradoxes of Progress, O’Hara again dem-
onstrated the receptivity of policy-makers to outside expertise from French,
German, Soviet, and Scandinavian influences.
  Introduction  9

For these “revisionists” the British state was not just about elite administra-
tors, it was teeming with external advisers, and internal specialists of all forms
of professional grades. Expertise was highly regarded, if not always enacted.
The state had porous and weak boundaries, rather than a dominant, strong,
and centralised power base in Whitehall. Policy-making and policy delivery
were not confined to a few streets in central London; advisory committees,
large supply ministries, and externals were central to the operations of the state.
And the role of the state in decline is contested, and shown to be a historical
construct, requiring analysis rather than blanket acceptance.
Consensus on the debate between the “declinists” and “revisionists” does
not appear to have emerged yet. Rodney Lowe’s 2011 Official History of the
British Civil Service restated earlier critiques that the administrative class was
indeed “hostile to outside expertise” up until 1956.50 Whilst noting “special-
ists were not uniformly scorned” and that they were used in service ministries,
he posits that they were not much listened to.51 Lowe’s civil service is also
emphatically Whitehall-centric. Industrial civil servants are excluded from
analyses, and comparatively little attention is paid to the role of the supply
ministries. However, a complex picture does emerge. Lowe notes how in 1957
the Cabinet Secretary, Norman Brook, explicitly called for better “leadership”
and “management” expertise in the administrative class, acknowledging a
degree of self-awareness of shortcomings. And Lowe’s history, which charts
the “failure of modernisation” in the postwar period in the British civil ser-
vice, makes apparent that some civil servants did actively embrace change,
writing: “civil servants themselves privately encouraged and advised each out-
side initiative [to modernise the civil service’s workings] … they also urged,
drafted and implemented many reforms.”52 Lowe also highlights the wide-
spread use of advisory committees staffed by externals throughout. For
instance, the work of the Haldane Committee was effectively an “outside
inquiry.” And subsequent bodies such as the Committee of Civil Research
(1925–1930) and Economic Advisory Council (1930–1939) were commis-
sioned in line with the Haldane principle of bringing “continuous fore-
thought” to policy-making.53
Whilst Lowe’s analysis has more in common with the “revisionists” (though
does not significantly reference their work, bar an acknowledgement of
Edgerton’s critique of C.P. Snow and the importance of the armaments indus-
try) than the “declinists,” other historians and political scientists in recent years
have continued the tropes of the latter category. Jon Davis’ Prime Ministers and
Whitehall from 2007 focuses overwhelmingly on the upper echelons of the
civil service, the policy-making ministries of Whitehall, and mentions little of
professionals, technical experts, or specialists in the civil service.54 Michael
10  A. E. Weiss

Burton’s The Politics of Public Sector Reform, though covering a later period
(from Thatcher onwards), continues to restate critiques of a generalist, amateur
civil service, quoting Blair’s Chief of Staff Jonathan Powell that “the civil ser-
vice is akin to a monastic order where people still enter on leaving university
and leave on retirement. Their attitudes change slowly and their powers of pas-
sive resistance are legendary.”55 In 2014, the political scientists Ivor Crewe and
Anthony King wrote of The Blunders of our Governments, placing the blame for
a series of administrative mishaps at the feet of Britain’s elite civil servants.56
Christopher Hood and Ruth Dixon’s 2015 review of the “New Public
Management” in Britain focused on the working of the non-industrial civil
service staff, even though the civil service industrial staff numbered some
50,000 in the Thatcherite period their enquiry covers.57 And Anthony Seldon’s
history of the Cabinet Office in 2016 covers the trials and tribulations of the
state’s Cabinet Secretaries but mentions nothing on external expertise, special-
ists, or the civil service outside the geographic confines of Whitehall.58
Consequently, two conclusions emerge regarding the literature on the use
of expertise by the British state: first, whilst O’Hara, Edgerton, and Pemberton
have done much to dismantle the unhelpful and overstated image of the ama-
teurism in the British civil service up until the 1970s, common, older, mis-
conceptions remain in more recent historiography; and second, there has yet
to develop a body of historiography comparable in revisionist zeal to the his-
tory of post-1980s Britain. (Notably, in Dreams to Disillusionment, O’Hara
also called for “future research…[to]…look at the influence of management
experts” in postwar Britain, citing the role of “US management consultants
McKinsey & Co. who advised the DHSS to adopt the new administrative
structure for the NHS [in the 1970s].”59 Chapter 3 in this book looks pre-
cisely at this.)
As such, this book seeks to contribute to the historical literature in three
ways. First, it hopes to demonstrate that though alive and well, the “declinists”
view of the civil service is inadequate and not fit as a continued means of
viewing the postwar British state. Second, that building on the work of the
“revisionists,” and covering a later time frame than Lowe, to show that the
British state has been highly receptive to outside expertise; however, the state
has not always been uncritical of expertise, and, at least with regard to man-
agement consultants, power rested with the internal permanent bureaucracy,
rather than the external management experts. And third, that a wider concep-
tualisation of the British state is needed than just the policy-making ministries
of Whitehall, or even Whitehall plus the supply ministries and industrial civil
servants. The state should be taken to include all reaches of the public sector,
and in so doing we gain a richer insight into how policy is developed and
enacted through the state. Consequently, this book seeks to move the debate
  Introduction  11

away from amateur versus expert or Whitehall against the rest of the public
state infrastructure. Instead, it takes as its starting point that external, and
internal, expertise has been much more prevalent in the British state than
“declinist” historians have acknowledged, and from there explores why exter-
nal expertise in the form of outside management consultancies was sought,
what were reactions to the work of these consultancies, and what impact the
work of the consultants had on the powers of the state.

States and State Power

We all talk about the state at some time or other – about what it owes us, what
we owe it, about where it does and does not belong in our lives – but we rarely
stop to ask what the term actually means.60 (David Runciman 1996)

As the political historian David Runciman’s quote describes, despite the

efforts of numerous political thinkers the “state” remains a contested, yet
rather neglected, concept in British history. Writing amidst the turmoil of the
Civil War, in Leviathan Thomas Hobbes described a “social contract state”
protecting the interests of the commonwealth from Hobbes’ infamous “state
of nature.”61 The mid-nineteenth-century philosopher John Stuart Mill popu-
larised the concept of a minimal state, whose aim was to protect individual
liberty.62 Mill sought to demarcate the lines between the “state” (largely coter-
minous with “government”) and “society” (that which was non-“state”).63 The
political theorist Bernard Bosanquet, by contrast, believed that it was a collec-
tion of individuals’ wills that formed the state; rather than being a “fiction” (as
Hobbes posited) the state could be “identified with the Real Will of the indi-
vidual.”64 More recently, historians of Britain have concerned themselves with
interrogating where the metaphysical “boundaries” of the state lie.65
These differing views, as Jose Harris has argued, highlight that there has
been a rather poor conceptualisation of the state in Britain.66 Quentin Skinner,
reflecting on Anglophone thinkers on the state, has traced several different
genealogies which help to explain this incoherency. For Skinner, early
seventeenth-­century writers such as Jean Bodin and John Hayward posited an
“absolutist” version of the state, where a supreme sovereign exerted full power
over his commonwealth. The subsequent (re)discovery of the works of the
Roman historian Livy coincided with a rising Parliamentarian movement
which rejected this “absolutist” model, and instead proposed what Skinner
has described as a “populist” model, where the “sovereign authority remained
at all times a property of the whole body of the state.” Hobbes’ Leviathan
provides a synthesis of these views, generating a “fictional theory” of the state,
12  A. E. Weiss

as the “artificial person of the sovereign[’s] specific role is to ‘personate’ the

fictional person of the state.” In reaction to these “fictions,” the utilitarian
Jeremy Bentham proposed a pragmatic approach to understanding the state
which meant, in Skinner’s words: “[that] the state…can only refer to some
actual body of persons in charge of some identifiable apparatus of govern-
ment.”67 L.T.  Hobhouse’s 1918 Metaphysical Theory of the State advanced a
similar view: “by the state, we ordinarily mean either the government or, per-
haps a little more accurately, the organisation which is at the back of law and
government.”68
In the 1980s, a “realist” interpretation of the state emerged from the social
scientists Theda Skocpol, Peter Evans, and Dietrich Rueschemeyer. Skocpol
et  al. sought to correct the overemphasis they felt Marxist and neo-Marxist
political scientists over the course of the 1960s and 1970s had placed on soci-
ety, class, and economic-centric explanations of state development. One such
Marxist writer, Ralph Miliband, famously wrote in his 1969 book The State in
Capitalist Society that “it has remained a basic fact of life in advanced capitalist
countries that the vast majority of men and women in these countries have
been governed, represented, administered, judged, and commanded in war by
people drawn from other economically and socially superior and relatively dis-
tant classes.”69 Though Miliband acknowledged the complex power structures
of the “state,” for him class was the dominant mode of analysis through which
to understand the workings of the state. In essence, Skocpol et al. proposed
that states had the ability to have autonomous goals and objectives beyond the
subservience to socio-economic and or class-based needs which Marxist writers
had emphasised. In their influential edited volume, Bringing the State Back In,
they eschewed “abstruse and abstract…grand systems theories” and instead
proposed that “states may be viewed as organisations through which official
collectivities may pursue distinctive goals… [or]…states may be viewed more
macroscopically as configurations or organizations.”70 In short, states were per-
ceived to be actors or institutions, with aims and objectives of their own.
The “realist” view has by no means asserted supremacy of interpretation,
however. Influential works have sharply critiqued its attempts to apply empir-
ical demarcations to understandings of the state. Timothy Mitchell, in
response to the work of Skocpol and others, decried: “the state has always
been difficult to define. Its boundary with society appears elusive, porous, and
mobile. I argue that this elusiveness should not be overcome by sharper defi-
nitions…‘bringing it back in’ has not dealt with this boundary problem.”71 In
2010, Mark Bevir and R.A.W.  Rhodes explicitly rejected “modernist-­
empiricist” conceptions of the state, instead proposing that the state can be
understood only as “cultural practice.”72 More recently, Patrick Joyce’s study
  Introduction  13

of the British state since 1800 shared Mitchell’s analytical concern with under-
standing the moving boundaries of the state by interrogating where and how
the state drew these boundaries.73
This book broadly adopts a “realist” approach to understanding the British
state, though it is influenced by all these writers. I share Mitchell’s concern
that the state is difficult to define, but I also believe we need to make certain
assumptions and define certain boundaries in order to consider the state ana-
lytically, especially with reference to another set of actors—in this instance,
management consultants. I also acknowledge Bevir and Rhodes’ emphasis on
the “cultural practices” of the state, as well as the focus of earlier Marxist writ-
ers on the societal and economic forces influencing state actions; it is clear
states do not emerge, or act, in a vacuum. As such, it is important to unpick
who the individuals were operating within the edifice of the state at any one
time and what their motivations and beliefs were.
Since the 1970s a consensus has emerged that Western states have seen their
powers eroded after the boom in the expansion of state powers in the immedi-
ate aftermath of the postwar period. Initially, this was perceived to be a conse-
quence of internationalist organisations such as the European Court of Human
Rights exerting power over previously sovereign states. More recently, the rise
of “multi-national corporations” through globalisation has also been held
responsible for this erosion. For instance, the political scientist Jens Bartelson
has explained in depth the views of Zygmunt Bauman, Hendrik Spyut, Stephen
Gill, and others, which, for the aforementioned reasons, assert that the state is
“dead.”74 Management consultancies have also been held responsible for this
death. Christopher McKenna has written how their use by the American fed-
eral government in the postwar period led to the creation of a “contractor
state.”75 In Britain, Christopher Hood and Michael Jackson in 1991 argued
that “consultocracy… [a] self-serving movement designed to promote the
career interests of an élite group of New Managerialists… [constituting of ]
management consultants and business schools” was supplanting the role of
politicians in leading state reform.76 Three years later R.A.W. Rhodes laid out
an intellectual framework for theorising the “hollowing-out” of the British
state (to which blame was largely attributed to the European Union and other
supra-state organisations) which political scientists such as Herman Bakvis in
1997 or more recently Graeme Hodge and Diana Bowman in 2006 have sug-
gested consultants have been key actors in.77 Yet against these claims of attenu-
ated executive power, political commentators such as Simon Jenkins have
argued quite the reverse: that the Thatcher, Major, Blair, and Brown govern-
ments all centralised prime ministerial powers, in the process creating a power-
ful and invasive state. Jenkins went so far as to declare in 2007 that “centralism
over the last quarter century was the new opium of the British people.”78
14  A. E. Weiss

Both sides of the “hollowing-out” debate, however, have failed to specify

what exactly has been hollowed-out. Whilst Rhodes decried the loss of “core-­
executive” powers, this elicits further questions as to what these are. Social
scientists from various fields provide inputs for how to conceptualise these
(assumed lost) powers. Michael Mann, for example, highlights how the works
of Weber stressed the importance of understanding the territorial boundaries
of state power.79 Foucault gives insights into the nature of disciplinary power
which the state can exert.80 The American political philosopher John Rawls
highlights the role states play in delivering justice.81 These diverse examples of
state powers (note the plural) demonstrate the need for a clear classification of
what the powers of states actually are, before we can begin analysing how they
have been impacted by consultants.
As such, in this book “state power” is analysed using a framework which
builds on the work of Michael Mann. In his 1984 article on “The Autonomous
Power of the State,” Mann identified four “persistent types of state activities”:
the maintenance of internal order, military defence/aggression, maintenance
of communications infrastructures, and economic distribution.82 Adding to
Mann’s model “legal power” and widening the focus on communications
infrastructures to broader “administrative power,” here I propose a refined
typology of “power” which the state exerts over the subjects and citizens of its
territory. This framework is used throughout this book as an analytical model
to determine how—if at all—consultancies have impacted on the nature of
state power over time. The different types of power explored here are:

1. Coercive power: the extent to which the state can determine whether citi-
zens of a state are at war or lose their liberty through imprisonment.
2. Fiscal power: the state’s ability to impose direct or indirect taxes on its citizens
or organisations which reside within its sphere of geographical influence.
3. Legal and normative power: how the state determines which actions are
within or outside the rule of law, and thereby whether a given individual’s
actions are legal or not.
4. Functional and service power: the way in which the state determines which
services are delivered to citizens through its bodies, most obviously, though
by no means uniquely, welfare services.
5. Administrative power: how the state chooses to deliver its functions and
services to citizens, such as the method of delivering benefits payments, or
the process through which citizens obtain a passport or proof of national
identity.
  Introduction  15

This book also interrogates who wields power in the British state. Whilst
earlier political thinkers identified monarchs as being the holders of sovereign
power, modern histories of Britain focus on the role of interconnected net-
works of politicians, civil servants, or non-state actors. However, histories of
modern Britain are almost without exception based around political adminis-
trations.83 The implicit conclusion from this is that politicians are ultimately
primarily responsible for major state reform. Since management consultants
have been used in so many large-scale changes in the British state, their his-
tory provides a perfect lens for testing the validity of this historical shibboleth.
Later, in the Conclusions, I argue that the conceptualisation of a late twentieth-­
century “governmental sphere” provides an apt framework for understanding
how and why individuals and organisations from both private and public
spheres became engaged in the governing of the state.84 This engagement, it is
suggested, has led in turn to the rise of the modern “hybrid state,” where the
lines of public and private sectors are blurred, and agents from both sectors
act in tandem in the delivery of public services. Whilst this resonates with the
work of the social scientists David Marsh and Matthew Hall, who regard that
the “British political tradition [BPT] is rooted in an elitist conception of
democracy…that ‘Westminster and Whitehall knows best’,” and of the eth-
nographical study of “British government” by R.A.W Rhodes, which focused
on his perceived “main actors” of the “ministers and the permanent secretar-
ies,” the “governmental sphere” is distinctive because it highlights the influ-
ence of agents outside of the Westminster-Whitehall axis.85 Rhodes’ work in
particular is important. Having coined the term “policy networks,” which
describes the “sets of formal institutional and informational linkages between
governmental and other actors structured around shared, if endlessly
­negotiated, beliefs and interest in public policy making and implementation,”
Rhodes concluded that “I expected to find much more evidence of engage-
ment with policy networks than turned out to be the case.”86 Whilst
Rhodes’ conclusions do not contradict the existence of the “governmental
sphere,” as this book explores, the role of consultants was seldom linked to
policy-­making, and more concerned with broader considerations of how best
to govern the state. Much of the conclusions reached in this book regarding
the “governmental sphere” support the work of Christopher Hood and Ruth
Dixon on Britain’s “New Public Management” reforms. In a brief passage,
Hood and Dixon highlight the role of external actors such as consultancies
(e.g. McKinsey and PwC), think-tanks (e.g. Institute for Public Policy and
Research, Demos, Institute for Government), and supranational organisa-
tions (e.g. World Bank, Organisation for Economic Co-operation and
Development) in developing new concepts around “government reform” in
16  A. E. Weiss

the period from the 1980s onwards.87 The “governmental sphere” builds on
this concept and shows the role management consultancies specifically played
in British state reforms.
This book uses the history of management consultancy to shed new light
on the British state and its powers in three ways. First, by adopting a “realist”
approach to the state, seeing how management consultants approached,
engaged, and impacted the different institutions of the state, demonstrating
its varied character, powers, and nature. Second, by defining distinctive pow-
ers which the state holds it is possible to examine in general how these have
changed over time, and in particular how they have or have not been changed
by management consultancies. And third, by understanding when and for
what work management consultants were hired by different parts of the state
we can understand where power lies in postwar Britain.

Unlikely Guests
[The] literature is particularly poor on the role of businessmen in government,
reflecting a more general indifference to the history of business. (David
Edgerton, Warfare State88)

As David Edgerton’s quote alludes to, academia has had relatively little to
say about the use of management consultants by the state. From the mid-­
1980s, a number of works analysed in detail postwar institutions of the state.
The use of management consultancy firms by these institutions was noted in
these histories, though not scrutinised in any detail. In 1985, Peter Hennessy,
in an article for the “Strathclyde papers on government and politics series”
(later serialised for radio), honed in on Ted Heath’s Central Policy Review Staff
(CPRS). (Heath was dubbed by Hennessy the “most managerially-­minded
Prime Minister of modern times.”) The CPRS, a “think-tank,” which sat in the
Cabinet Office and advised on long-term planning in government, was staffed
by “insiders and outsiders from industry and universities.” Notably, its creation
was “drawn up by a firm of consultants.”89 Yet the influence and impact of
these consultants are not explored at greater length. Terry Gourvish’s 1986 his-
tory of British Railways goes further, detailing the use of consultants from
Production Engineering, Coopers and Lybrand, and McKinsey & Company
during the period 1967 to 1973 (the latter for a “fee in excess of £150,000”).
Gourvish highlighted the significance of the procurement of consultants, stat-
ing it was argued that “the employment of consultants would help to validate
the recommended changes internally in the eyes of Government.”90 However,
  Introduction  17

examination of why consultants would validate the changes or how they reached
such a position of influence is not explored. In a similar fashion, Geoffrey Fry’s
1993 study of the Fulton Committee and Charles Webster’s multi-volume his-
tory of the NHS in the 1990s note the use of external management consultants
by both bodies, but do not explain the implications of this.91 Duncan Campbell-
Smith’s biography of the Audit Commission Follow the Money is a powerful
exception to this oversight. Published on the Audit Commission’s 25th anni-
versary, Campbell-Smith highlighted the role of the Commission in transmit-
ting consultancy-style practices into the audit of public services, and the
extensive influence of McKinsey in its setup (two of its first three Controllers
were ex-McKinsey consultants), culture, and methodological approach.
Fittingly, Campbell-­Smith was also previously a consultant at McKinsey.92
The use of management consultants by the state did not become a for-
malised practice with guidelines and established procurement routes until the
1960s. Coupled with the “30-year rule” for making government archival
material public, it is unsurprising that it was not until 2000 that the first (and
only) dedicated study of consultancy and British government emerged. In a
comparative appraisal of the use of consultants by the governments of Britain,
France, and Canada, the political scientist Denis Saint-Martin identified two
critical phases in Britain which opened the door for consultants. First, “the
election of Labour in 1964…and the period of Harold Wilson’s scientific and
technological revolution…led to the rise of managerialist ideas.”93 From this
era arose the aforementioned Fulton Committee report—which Kevin
Theakston has labelled “the public administration equivalent of the Bible”—
of which the supporting Management Consultancy Group was staffed with
British consultants from AIC Ltd and recommended the creation of a Civil
Service Department (CSD) which actively encouraged departments to use
external consultants.94 Second, Saint-Martin identified Thatcher’s move to a
“market-based model” of “new managerialism” in the public sector from
which consultants profited extensively.95 Though the “high-profile” use of
consultants by the state in the 1960s and 1970s is noted, Saint-Martin, writ-
ing in 2005 with the business historian Matthias Kipping, argued that “con-
sulting to the government experienced a significant take-off only during the
1980s.”96 Saint-Martin has suggested that the main reason for the use of con-
sultants by the state was the development of “policy legacies” between the “old
managerialism” of the 1960s and the “new managerialism” of the 1980s.97
This is a variant of a “path dependency” theory: that the use of consultants led
to an ever-increasing use of consultants.98
Saint-Martin also explicitly links consultancy to political administrations and
argues that since the 1980s the relationship between politicians and external
18  A. E. Weiss

consultants was “politicised.”99 Civil servants are not considered key in the use
of consultants. This coheres with the works of Anthony Sampson, Hugh Heclo
and Aaron Wildavsky, and Ferdinand Mount which highlight the obstructionist
and closed “generalist elite” of British civil servants, who were inimical to exter-
nal support.100 In Saint-Martin’s telling of the history of consultancy and the
state, politicians and management consultants have an important relationship
in “building the new managerialist” state; the civil service is largely a passive, at
times resistant, agent in this change. By contrast this book challenges this view
and, instead, firmly endorses the arguments of the “revisionists” that the civil
service has been far more scientifically, technically, and administratively minded
than many have hitherto credited it.101
Sociologists, whilst not explicitly referring to management consultants,
have provided useful hypotheses for why “outsiders” may be used by organisa-
tions. Weber posited that only permanent bureaucracies could be truly impar-
tial in their judgements.102 The implication from Weber therefore must be
that consultants (who are by their nature temporary and external) are used to
provide biased advice to reinforce or strengthen the position of their clients.
Weber was also concerned with understanding how the emergence of “ratio-
nalisation” (the development of efficiency-based models of calculating social
value) tied into the development of bureaucracies within capitalist societies.103
Michel Foucault focused in his later years on studies of “governmentality,”
which bore similarities with Weber’s rationalisation concerns. Foucault’s book
regarding the convergence in rational-based methods of governing private
enterprise and public service may help to explain the greater transmission of
ideas, disseminated by consultants, between the two.104 Bruno Latour’s “actor-­
network theory” generates a useful framework for analysing the growth of
consultant-client relationships. Whilst Latour’s focus is on the scientific com-
munity, parallels are apparent with the field of management.105 Broader forces
are put centre stage in the works of Anthony Giddens, which suggest, some-
what like Foucault, that the narrowing of geographical and cultural differ-
ences arising from globalisation facilitated the movement of consultants and
their ideas between private, public, and global spheres.106
It is the latter of these hypotheses which has been seized upon by the rela-
tively small literature on management consultancy and the British state.
Christopher McKenna, in his 2006 history of the consultancy industry, The
World’s Newest Profession, explained the emergence of American “strategy”
consulting firms in Western Europe as being part of an “exportation of the
American model.”107 McKenna agrees with Matthias Kipping that the success
of this export was in part due to the “alleged superiority of US managerial
expertise,” though Kipping goes further in highlighting how consultants
  Introduction  19

tapped into “local elite” networks to achieve this successful exportation.108

Both McKenna and Kipping’s main analytical considerations are, however,
focused on the specifics of the consultancy industry as opposed to the impact
consultancy has had on the British state.
More recently, however, Michael Weatherburn’s unpublished doctoral the-
sis on work measurement in British industry during 1914–1948 has gone
some way to rectifying the misconception of the state’s disinterest in consul-
tancy advice. Whilst demonstrating that there was minimal evidence of the
use of consultants—at the time, dubbed “efficiency experts”—during the First
World War, Weatherburn paints a compelling picture of the active use of con-
sultants by the supply ministries during the Second World War; in particular,
the Ministry of Aircraft Production (MAP), the MoS and the National Filing
Factories, which were part of MoS. Furthermore, alongside this use—which
was focused on increasing worker productivity through “work measurement”
techniques—Weatherburn evidences how, in addition to Urwick, directors of
two other British management consultancies were seconded into wartime ser-
vice. Robert Bryson of Production Engineering served the Royal Engineers
and an AIC director, R.J.  Gigle, worked on light metal alloy supplies for
MAP.109 Weatherburn proposes that the historiographical neglect of these
contributions can be ascribed to the vilifying of the role of Charles Eugène
Bedaux, one of the main proponents of work measurement in Britain, by the
press and contemporary writers.110 Yet, Weatherburn’s thesis aside, the relative
silence of the academic community is puzzling. As Edgerton’s aforementioned
quote rightly notes, the role of business in British political history has been
neglected.111 And by comparison, the interplay of other professions such as
accounting, public relations, or law and the state have at least prompted some
academic debate.112 Reasons for this oversight by historians are likely to be
varied, though three major contributing factors seem plausible. First is that
management consultancy, though having a longer history than popularly
assumed, is still a relatively new industry, and quite simply there has been less
time for historians, temporally speaking, to research the topic. Second is that
the subject matter may seem rather dull or even unintelligible (consultancy
reports are unsurprisingly heavily laden with management-speak) and so a
topic such as public relations or marketing may appear more accessible. And
third, and most importantly, involves the nature of consulting assignments.
Consultants, ideally, aim to solve important problems: for example, improv-
ing management of health services; supporting planning to achieve objectives
in departments; automating processes to enact specific political policy com-
mitments. The nature of these problems may seem innately more interesting
than the work of consultants to historians, so the work of consultants has
20  A. E. Weiss

been deprioritised for the perceived “bigger prize” of understanding the

underlying problem. It is likely, that for this reason, Glen O’Hara’s work on
governing notes the employment of McKinsey by the NHS, but does not
analyse further; Rodney Lowe’s work on Fulton highlights the role of consul-
tants in the Management Consultancy Group report, but maintains the focus
on wider reforms, and so forth.
Irrespective, a major consequence of this silence has been that interpreta-
tions of the state’s use of consultants have been from two rather problematic
sources: popular media and official reports. The former has been almost
unfailingly critical of the use of consultants, whilst the latter, though largely
balanced in its assessments, is nonetheless hampered (in perceptions, at least)
by the fact that the state is reviewing its own operations.
Media hostility has broadly tracked the growth of state expenditure on
consultancy: in the 1960s it was largely positive; by the late 1970s, it was
enquiring but largely neutral; and from the 1980s onwards increasingly
damning. In 1964, William W. Allen, an American management consultant,
was granted the publicity of a double-page opinion piece spread in The Sunday
Times to challenge whether “Britain [was] a half-time country, getting half-­
pay for half-work under half-hearted management?”113 By 1977, as state work
expanded, the Financial Times uncritically noted that “most consultants agree
that even if state work is not the most profitable it certainly carries prestige
value.”114 Yet by the 2000s, the mood had changed. In 2006, a former consul-
tant, David Craig, published Plundering the Public Sector: How New Labour
Are Letting Consultants Run Off with £70 Billion of Our Money.115 Such was
the impact of the book that it was even quoted by the Parliamentary select
committee on the government’s use of management consultants.116 Years of
critical commentary followed, describing public sector consultancy variously
as a “swindle,” “scam,” or “rip-off.”117 Political condemnation followed. In
2010, the Leader of the Opposition, David Cameron, decried how:

For the last decade or so, in the name of modernisation, rationalisation and
efficiency, we have been living under a regime of government by management
consultant and policy by PowerPoint. The result has not been a contented,
streamlined nation, humming with efficiency and gleaming with modernity.
The result has been an explosion of bureaucracy, cost and irritation, endless
upheavals and pointless reorganisations, the elbowing aside of colourful, human,
informal relationships based on common sense and trust in favour of the grey,
mechanical, joyless mantras of the master planner with his calculations, projec-
tions and impact assessments.118
  Introduction  21

On the whole, media coverage has promulgated the view that consultants
have “plundered” public services, are too many and too influential, and are a
phenomenon which only became an issue of public concern as Britain moved
into the twenty-first century.119
By contrast, the three official government reports which have covered the
state’s use of management consultants (a 1994 report by Margaret Thatcher’s
Efficiency Unit, a 2006 NAO report, and a 2010 NAO report) have been mea-
sured in their verdicts.120 Each attempted—and struggled—to quantify govern-
ment expenditure on consultants and stressed the “value” which consultancies
brought whilst caveating against the dangers of poor procurement. Two earlier
reports by HM Treasury (in 1965 and 1990) advised on how departments
could make the best use of consultants, but were not covered by the media.121
As a consequence, though the official reports provided a slightly longer history
of the state’s use of consultants, they also reinforced the impression that consul-
tancy has only been part of the British state’s post-1980s landscape.
The media, official reports, and works of Saint-Martin and Kipping cement
this view of the state-consultancy relationship being a development of the past
30 years, and one led by politicians. However, this chronological focus, which
ties consultancy to the era of the “new managerialism” of Thatcher and beyond,
is problematic. It implicitly assumes that consultancy is inherently market-
based. And by linking the use of management consultancy to political admin-
istrations it suggests that politicians were instrumental in its use. But
consultancy’s use by the state has its origins much before the swings to eco-
nomic liberalism of the 1980s, and politicians are frequently scathing of its
benefits. Thatcher, for example, was heard to have fumed after meeting with
the MCA that the MCA was on a “selling spree” and John Major has said that
consultants were “bad…[and he was] against their use.”122 These accounts risk
portraying “politicians,” “civil servants,” and “consultants” as monolithic
groups, with simple “positive” or “negative” relationships with one another. By
delving deeper into history, a far more nuanced relationship between consul-
tants and state institutions and actors is consequently uncovered in this book.

A Heterogeneous Global Industry

It is notoriously hard to define consulting. There are strategy, change, brand,
communications consultancies…it is very hard to draw the line and it’s like
comparing an apple with an orange with a chair with a cabbage with a tree.123
(Ian Watmore, Permanent Secretary, Cabinet Office (2012), UK Managing
Director, Accenture (2000–2004))
22  A. E. Weiss

If Oxford Handbooks represent a “seal of approval” of the academic wor-

thiness of a topic, management consultancy gained this status in 2012. The
Oxford Handbook of Management Consulting, covering a diverse array of issues
from the historical development of consultancy to the propagation of “man-
agement fashions” by consultants and the role of consulting in the “knowl-
edge business,” noted how consulting had become, “in a relatively short period
of time…a thriving area of research” (though the Handbook featured nothing
on the impact of consultants on governments).124 This growth in academic
research on management consulting has generated two commonly accepted
views. First, though consulting is recognised as a diverse industry with “per-
meable boundaries”—as Ian Watmore’s quote, above, suggests—it is argued
that it can nonetheless be analysed as a coherent industry.125 And second, that
consulting is a suspect endeavour which needs critical analysis of the motiva-
tions of those who undertake it and its proponents.
Early publications on consulting did not share these views. In 1963, the
four largest consulting firms in Britain supplied data that resulted in an influ-
ential article by Professor J. Johnston of the University of Manchester. Entitled
“The Productivity of Management Consultants,” the article claimed that con-
sultants had contributed “one quarter [0.5 per cent] of the annual productiv-
ity increase achieved [in the British economy] in recent years.”126 The historian
Michael Ferguson has erroneously claimed that beyond publication in an aca-
demic journal the article did not receive “any wider coverage.”127 In fact, in
the House of Commons in 1965, Graham Page (a Conservative
Parliamentarian) heralded the “astonishing” conclusions of the report, and in
1969, the President of the Board of Trade partly justified a proposed £15 mil-
lion grants scheme to encourage small firms to use consultants on the basis of
Johnston’s findings.128 In the United States, Hal Higdon’s 1969 The Business
Healers was similarly positive on the role that firms such as Booz Allen
Hamilton, McKinsey & Company, and George S.  May were having on
American industry.129 In 1982, Patricia Tisdall’s Agents of Change highlighted
the challenges consultants faced following a difficult decade in the 1970s,
though it was largely positive about the “boundless opportunities” which con-
sultants could advise on in the future.130
It was not until the 2000s, however, that management consulting became
a popular source of academic focus.131 The 2002 compendium Critical
Consulting, by Timothy Clark and Robin Fincham, focused on the various
critiques which had been levelled at consultants: too much use of rhetoric and
persuasion, a lack of authenticity in consultants’ work, and that the consul-
tants acted as though their clients were “dupes.”132 A year later, Alfred Kieser
  Introduction  23

made the significant claim that consultants treated their clients as “mario-
nettes on the strings of their fashions.”133 In part, such criticisms have arisen
owing to the perceived questionability of consultants’ work (e.g. high-profile
bestselling business books such as In Search of Excellence, by two McKinsey
consultants, engendered a good deal of hostility from academics; the authors
were attacked for their lack of rigour) and their perceived ubiquity (reinforced
by the popular media).134 Such contributions by the academic community,
though not directly relevant to the relationship between consultants and the
state, are important areas of enquiry for this book. In particular, the accusa-
tion made by Kieser is considered throughout.
Matthias Kipping, more than any other business historian, has sought to
highlight the differences between consulting firms. Kipping initially proposed
three distinctive “waves” of consulting firms in 2002 (scientific management
firms; organisation and strategy firms; and IT-based networks).135 In 2013,
this time writing with Ian Kirkpatrick, the waves were updated to “types” and
four were identified: “Traditional” (which focused on efficiency improve-
ments and entered the market in the 1930s); “Accounting” (which focused on
finance and administration work and entered the market in the 1950s);
“Strategic” (of largely American origins, emerging in the 1960s); and “IT”
(dealing with data processing issues, and entering the market in the 1970s).136
Kipping and Kirkpatrick use this taxonomy to correctly stress the different
“pathways of change” which professional service firms can undertake in terms
of their structure and development.137 By using a refined and updated model
of their taxonomy based around “generations” of consultancies (described
below), this book is able to test whether the heterogeneity of the consultancy
industry is so pronounced that the concept of a coherent consultancy industry
is fundamentally flawed, thereby challenging the entire premise of the existing
academic literature on consulting.
There are important limitations to this book when seeking to extend its
conclusions beyond Britain. American ideas of governance and Americans
consultancies frequently appear throughout this book, but the relationship
between the American state and consultancy is different from the British one.
This history is not a comparative one, though as suggested in the Conclusions,
one between Britain and the United States would be beneficial. As such, it is
important to highlight certain differences and similarities between the two
histories.
In terms of differences, in the United States the consulting market is—and
has always been—significantly larger than in Britain. Data from the research
company Source Global Research estimated the US consulting market to be
worth $55 billion in 2015, compared to a UK market of $10 billion.138 The
24  A. E. Weiss

public sector consulting market has also been historically larger in the United
States (estimated at $6 billion in 2015) although in proportionate terms, the
public sector is much bigger for British firms than US ones; 20 per cent versus
11 per cent, respectively.139 This focus on the private sector is reflected in the
historiographical literature on US consulting firms. Walter Kiechel, former
editor of Harvard Business Publishing, wrote The Lords of Strategy in 2010
which explored how “strategy…became the lynchpin for how we think about
doing business in the modern corporate world,” with a specific focus on the
American consultancies McKinsey & Company, Bain & Company, the
Boston Consulting Group (BCG), and Monitor Company.140 The business
journalist Duff McDonald’s The Firm posited that “McKinsey consultants
have helped companies and governments create and maintain many of the
corporate behaviours that have shaped the world in which we live,” though
the overwhelming focus of his book is on the “corporate sector,” as from the
1970s onwards Duff claims McKinsey “was content to make its contributions
to the world almost entirely through the corporate sector.”141 McKenna’s The
World’s Newest Profession is the pre-eminent academic work on the history of
the US consulting industry and though McKenna concludes “the ‘hollowed-­
out’ structure of the American contractor state owes its form not only to
pragmatic public concerns about the growth of federal bureaucracy, but also
to the long-term influence of management consultants,” only one of the nine
chapters is to devoted to this topic.142
There are two further differences to note. The first, on the consulting side,
is the specific firms involved. Whilst many of the consultancies operating in
the British state during the twentieth century also had a presence in the
United States, companies such as Booz, Allen & Hamilton, the RAND
Corporation (technically a non-profit organisation although with a consult-
ing arm), and Arthur D. Little were far more utilised by the US federal gov-
ernment than by the British state in the twentieth century; and inversely,
McKinsey & Company proved more frequently engaged by the British state
than in the United States.143 The second difference is on the civil service side.
Whilst in Britain from the era of Harold Wilson onwards special advisers
(political appointments to the civil service, exempt from impartiality require-
ments) became more prevalent, they were never significant in number, with
approximately 68 in 2007, for instance.144 In the United States, by contrast,
political appointees to the federal government were estimated by Ernst &
Young (a consultancy) to number between 3000 and 4000 in 2012.145 As we
shall see, the perceived impartiality of the civil service has been an important
factor in the growth of consulting to the state in Britain, and so this difference
with America is noteworthy.
  Introduction  25

Nevertheless there are important similarities. The management academic

Robert J. David noted on the “growth of strategy consulting in the United
States” in the postwar period, and the main reasons he cited included “the
increased corporatisation of non-corporate sectors, the spread of business
education…[and]…the increased complexity…of corporate organisations.”
This book will examine if these reasons could equally be applied to the British
context too.146 For instance, the journalist Joe Flood’s investigation into the
causes of the 1970s fires in New York City in part placed the blame for the
devastation on Mayor John Lindsay’s fascination with “numbers to help gov-
ern…and the resultant rise of scientific management and progressivism”
which led to the ill-fated hiring of the RAND Corporation to advise on the
fire department’s operations.147 This mirrors the rise of consulting to the
British state in the 1960s and 1970s, which placed a similar faith in data and
numbers in decision-making. Like in Britain, the consulting industry in the
United States has been viewed with hostility by the popular press, academic
publications, and politicians; for instance, Ralph Nader, the American politi-
cal activist, wrote in 1975 of the “vast waste pyramided upon waste and the
colossal incompetence and self-serving quality of so many consultantships.”148
And again, as in Britain, consulting in the United States never attained a for-
mal level of professionalised status, as Christopher McKenna has high-
lighted.149 Remembering these similarities and difference should help guide us
as we explore the generalities and peculiarities of the state-consulting relation-
ship in Britain.

Definitions and Frameworks
This book has deliberately chosen two highly problematic terms as being cen-
tral to its enquiry: “management consultancy” and the “state.” As a result of
the fact that management consultancy is not a profession with formal qualifi-
cations such as law or accountancy, definitions frequently vary. In the 1980s,
the MCA adopted the following definition150:

a person or firm whose principal activity is to provide to business, public and

other undertakings, assistance in identifying and investigating problems and/or
opportunities concerned with policy, organisation, procedures and methods,
recommending appropriate actions and helping to implement those recommen-
dations as necessary.151
26  A. E. Weiss

Instructively, this definition was only used by the MCA from the 1980s to
the mid-1990s.152 Before and after this period (until the mid-2000s) no for-
mal definition was adopted. This aptly reflects the changing and diverse nature
of management consultancy. However, in a bid to provide quantitative evi-
dence to this topic, this book has made substantial use of statistics (compiled
and analysed by the author) relating to the use of “management consultancy.”
Here, whatever “management consultancy” meant to the agents recording the
statistics at the time is accepted. Thus if a state department recorded the
employment of a given firm as “management consultancy work,” according to
whatever definition they used then this research considers the work as such.
This reflects the notion that management consultancy is in the eye of the
beholder, and though this inevitably leads to some problems (e.g. depart-
ments’ definitions may differ) these are problems inherent in the heterogene-
ity of the industry, and are therefore important to acknowledge and consider
rather than gloss over by imposing a retrospective, uniform definition.
The nature of management consultancy is complex and chaotic.
Highlighting this point, hoping to simplify analyses of the industry, a 2008
MCA report grouped management consultancy firms operating in the United
Kingdom into six different types. This differentiated between firms which
offered: “pure” strategy or management consulting (10 per cent of all revenues
of MCA member firms in 2007); management consulting, accounting, tax,
and corporate advisory services (21 per cent); management consulting and IT
consulting (9 per cent); management and engineering consulting (3 per cent);
management consulting and outsourcing (1 per cent); and combined man-
agement consulting, IT systems development, and outsourcing (57 per
cent).153 A driving investigation of this book is whether it is sensible to view
“management consultancy” as a homogenous entity. For the purposes of
examining the period from the 1960s onwards a division of the five most
significant “generations” of consultancies operating at the time is suggested in
Table 1.1. This generational split is chosen because it brings clarity to attempts
to understand the nature of the industry and because it highlights how tradi-
tional, discrete chronological splits do not capture the subtleties of the indus-
try, as the work which consultancy firms did for the state transcended political
administrations.
These five generations were not the only firms operating in the British state
sector at the time. There were also firms which specialised in recruitment,
personnel management, and marketing. But these generations dominated the
general consultancy market and perceptions of the nature of management
consultancy in this period. Whilst there were material differences in their
origins, recruitment policies, the type of work they undertook, their fees,
Table 1.1  Five generations of management consultancy firms in Britain
Generation Origins Entry into UK state sector Principal service offerings Leading firms
“British” 1900s–1930s 1940s Shop-floor productivity AIC Limited; PA
Arising from Edwardian-era Some limited interwar work increases using scientific Management
interest in Taylorism and although much more in the management techniques Consultants; P-E
scientific management postwar period as a result of Consulting Group;
the Board of Trade’s Urwick, Orr &
sponsorship Partners
“American” 1920s–1930s 1960s High-level management Arthur D. Little; BCG;
Mixture of developments in Originally looking to set up issues such as Booz Allen
the industrial engineering beachheads in Europe to organisational structure Hamilton; McKinsey
industry and post-Great serve American clients and and corporate planning & Co.
Depression regulatory subsidiaries but quickly
changes in the US banking recognised a clamour for
system work from UK state bodies
“Accountants” 1960s–1970s 1960s–1970s Technology-focused work Arthur Andersen;
Response to increased Initially small scale quantitative such as operational Coopers & Lybrand;
competitiveness in audit studies but as state interest in research; cost-benefit Peat, Marwick,
work and global recession automation grows they analysis; and (later) Mitchell & Co.;
forcing firms to diversify quickly adapt to this market information systems design Touche Ross
their services opening and installation
“Data 1980s 1980s–1990s Large-scale IT Capgemini; HP; IBM
processors” Technological developments Supported large implementation offerings Global Services;
and greater networked computerisation projects, for Fujitsu; CSC, Logica
connectivity led to example, the automation of
substantial market for tax receipts for the Inland
advisory work on IT systems Revenue
“Outsourcers” 1990s–2000s 2000s Running back-up support EDS; Capita
 Introduction 

Move towards greater Predominantly through functions with some Consulting; Serco
competition in public service large-scale IT outsourcing advisory work Consulting
delivery and an opening up
27

to non-state providers
created service demand
28  A. E. Weiss

client perceptions, and perceptions of themselves, the generations were also

highly influenced by each other’s presence in the consultancy market. For
instance, at the start of this period the British generation—with their focus on
achieving productivity increases on the shop-floor via scientific management
techniques—were the market leaders. But by the end of the 1970s their tradi-
tional client base and market offering had eroded with the onset of British
deindustrialisation, a growing desire to emulate perceived American commer-
cial and industrial successes, and a rising interest in bringing technological
developments into both industry and the state. Reacting to market pressures
each generation sought to copy the successes of their competitors. Thus, the
British generation began offering information technology services in response
to the success of the accounting generation. This process of copy and conver-
gence led to a scenario that by the 2010s, of those consultancy firms still
operating from these distinct generations, the overlap in their principal ser-
vice offerings was greater than ever before.
The use of the term “state” is even more problematic. As discussed earlier,
here, a pragmatic version of Benthamite common sense is used to define the
“state.”154 The “state” is taken as representing the institutions of the executive
(central) government and its ancillary bodies, as well as the elected and non-­
elected officials who govern these institutions. The “state sector” is understood
as being largely coterminous with the “public sector” and therefore includes
local government and bodies such as arms-length bodies, agencies, the nation-
alised industries, BBC, NHS, and Bank of England. Conversely, for analytical
cleanliness, the “non-state sector” is taken as the “private sector”—consul-
tancy income data is only split into public and private sectors—and so this
includes charitable, voluntary, and philanthropic groups too. These are, in
other studies, often referred to as the “third sector.” As such, where appropri-
ate, known issues with this simplified public/private demarcation are high-
lighted. Of course, the public/private supposed dichotomy is itself problematic,
and so in an attempt to bring clarity to this division, here the “public sector”
is defined as the parts of British gross domestic product resulting from public
finances.155 Consequently the “state sector” is seen as forming three connected
bodies: the central executive (predominately Westminster- and Whitehall-­
based) government, which is responsible for the overall administration of the
“state sector”; the local executive government (local authorities) which both
administer and deliver many local services (such as local authority–maintained
schools or refuse collection); and the wider non-executive state bodies (such
as arms-length bodies, the nationalised industries, and NHS) which are con-
cerned with service delivery in the “state sector,” mandated by the central and
local executives, which have varying degrees of autonomy.
  Introduction  29

This definition is adopted for three reasons. First, by defining different ele-
ments of the state we can understand how it connects together; for example,
much executive government legislation has a direct impact on bodies in the
wider public sector, and when this leads to reforms management consultants
are often called in. Second, in this period consultants did not consider the
“state” or “government” to be one particular entity or power base. Rather, they
differentiated between the “public” and “private” sector and recorded their
work as being in either of these areas. Third, by viewing the state in this man-
ner we can compare the ways in which its different elements used manage-
ment consultants. Only by firmly demarcating our boundaries of analysis of
the state can we begin to comprehend what the “state” really means.
In short, therefore, by the “British state” we mean the bodies and those
individuals who govern them which are wholly (or, as our period of enquiry
progresses, almost wholly) financed by public expenditure and wield power
over the territory of the British Isles.
As discussed above, historiographic debates still exist regarding the nature
of the British state. However, it is apparent from the evidence and literature
that the postwar British state did seek external views from a variety of informal
(such as individual advisers) or formal (such as advisory committees) means;
that the state was much more than a few streets in Whitehall, rather, it extended
through the United Kingdom, with the majority of its staff outside of London;
and, lastly, the state was much more than just the “elite” administrative class—it
involved all types of grades of individuals, not just executive and clerical, but
professionals such as scientists and technicians, industrial as well as non-­
industrial civil servants. Setting out what we know about the British state as
our starting point for analysis in this manner provides the backdrop against
which the history of management consultancy and the state can be layered
upon.

Structure of the Book
In this “Introduction,” the major historical questions of research have been
considered, and placed within the context of current readings of the British
state, state power, and consultancy. A detailed reconstruction of all public sec-
tor consultancy expenditure since 1963 has been presented, and the methods,
sources, and analytical frameworks which are used to address the proposed
research questions have been shared.
“Chapter 2: Planning, 1960s–1970s” considers how the concept of
“planning” in the 1950s led to the emergence of a dynamic and growing
30  A. E. Weiss

management consultancy industry, dominated by the “Big Four” firms which

were all “British generation” consultancies: Urwick, Orr & Partners; Production
Engineering; Personnel Administration; and Associated Industrial Consultants.
The postwar boom in interest in “planning” is shown to have ushered consul-
tants into the public sector. But, through researching Harold Wilson’s own
papers and correspondence, Wilson’s reforming zeal and suspicions of the civil
service are highlighted as critical in the creation of a state market for consul-
tancy. Though seldom noted, management consultants from AIC Limited
undertook the majority of the influential Fulton Committee on the Civil
Service review; and so the subsequent indelible impression the British genera-
tion left on the civil service is considered in this chapter. The role consultants
played in advising departments on how to revive British industry during the
challenging decade of the 1970s is also focused on.
“Chapter 3: Reorganising, 1970s” demonstrates how the reorganisation of
major state bodies such as British Rail, the Bank of England, and the Atomic
Energy Authority heralded the emergence of the “American generation” of
consulting firms. Set against a backdrop of fears of British economic decline,
the perceived superiority of American management “know-how” is demon-
strated as a purported solution to Britain’s ailments. The ubiquity of McKinsey
& Co. in particular was such that there was talk of the term “to be McKinseyed”
entering into the Oxford English Dictionary in this period.156 American con-
sultancies actively—and with considerable success—sought to build relation-
ships with state officials through infiltrating and mimicking “elite” networks.
This chapter presents the first of two detailed case studies: McKinsey &
Company’s support for the 1974 NHS reorganisation. This case study is spe-
cifically chosen for three reasons. First, because the NHS, since its inception,
has proved central to conceptions of the postwar British state.157 Second,
because of the only partially fulfilled attention it has solicited from historians.
Both Christopher McKenna and Glen O’Hara have proposed this episode as
one for investigation by future researchers, yet—to date—this has not mate-
rialised.158 And third, because the source material is abundant, archives
abound in the National Archives in Kew, and materials relating to the reor-
ganisations can be found in the National Archives of Scotland in Glasgow and
National Archives of Ireland in Dublin too. In this case study, the work of
McKinsey in developing a new structure for the NHS is analysed. Particular
focus is placed on the cross-party continuity behind the reforms, which chal-
lenges long-held assumptions regarding the adversarial nature of British poli-
tics. In addition, the peculiar geographic boundaries of the NHS—highlighted
by the work of the consultants—and how they are demonstrably not cotermi-
nous with the British Isles are highlighted. This therefore challenges concep-
  Introduction  31

tions of a coherent “British state” and highlights the need for a more subtle
and granular analysis of twentieth-century Britain.
Amidst the backdrop of post-Organisation of Petroleum Exporting
Countries (OPEC) I oil and economic crises, “Chap. 4: Automating, 1980s”
concerns itself with the divergence of many accounting firms into consultancy
services (giving rise to the “accountancy generation”). This led to an era in
which Arthur Andersen dominated the British state market, providing large-
scale computerisation support for numerous departments. The chapter also
explores how the consultancy industry began to change in nature with greater
numbers of firms offering long-term IT support to state departments seeking
public sector efficiencies, as the “data processing generation” of consultancies
such as Logica, CSC, and others entered the state market in the 1970s and
1980s. The second case study of this book rests here, covering Arthur
Andersen’s work on the “Operational Strategy.” This case study was also cho-
sen for three reasons: the sheer scale of the “Operational Strategy”; how it is
almost completely absent from accounts of the modern British state; and the
diversity of sources available to interrogate its significance—from archives,
contemporary publications, and first-hand participants in the programme.159
In this case study, the American firm’s work supporting the Department of
Health and Social Security’s computerisation of social security benefits
throughout the 1980s is addressed. The case study highlights how influential
the historically under-researched cadre of executive and clerical civil servants
were in driving the Operational Strategy, and how they formed close bonds
with the external consultants. Particular attention is placed on the political
rationale for the Operational Strategy, and how the automation of the machin-
ery of government was used to quell public unrest.
“Chapter 5: Delivering, 1990s–2000s” reflects on the fragmented consul-
tancy market from the late 1990s onwards. Whilst the most high-profile state
assignments were still undertaken by “American” or “accountancy” firms (such
as McKinsey’s support in the target-setting and delivery of New Labour’s pub-
lic sector reforms during the second Blair administration), new market
entrants specialising in outsourcing services were growing in influence (the
“outsourcing generation”). Companies such as Serco and Capita began to
form a novel relationship with the state to previous generations of consultan-
cies. In this chapter, the work of the influential Prime Minister’s Delivery Unit
(itself a progenitor of Heath’s Central Policy Review Staff and Thatcher’s
Efficiency Unit) and the work of outsourcing firms for local authorities are
analysed in detail.160 Where consultancies had hitherto largely confined them-
selves to advisory or implementation work, by the twenty-first century the out-
sourcing generation of consultancies commenced providing service delivery
32  A. E. Weiss

functions to the state, representing a significant discontinuity from historical

precedent. By moving to providing state functions, rather than just advising
on how to provide them, the change brought about by the “outsourcing gen-
eration” raises materially different questions about the state-consultancy rela-
tionship than previous generations of consultancies had done.
“Chapter 6: Conclusions” draws together the chapters and considers the
analytical questions and frameworks raised in the Introduction, as well as
pointing to potential areas of future historical enquiry. This final section also
answers the particularly salient contemporary question as to the overall ben-
efit management consultancy firms have brought to the state and the broader
question of what causes states to reform. In particular, two concepts—raised
throughout the book—are explored at length which help to explain the rise of
state consulting in this period: the “governmental sphere,” where private and
public agents discoursed on the best means of governing organisations; and the
“hybrid state,” where the boundaries between public and private blurred with
respect to the operations and powers of the British state.
Throughout the chapters and appendices, tables are presented with samples
from the unique database of consultancy assignments for the state which I
have collated. This gives a greater sense of the scale and scope of the state-­
consulting relationship than the necessarily precise focus of the chapters can
provide, and at the same time hopefully provides fertile research ground for
future scholars. A selection of assignments is provided in each chapter, with
the more detailed databases contained within Appendix 2. Where appropri-
ate, brief biographies of significant individuals are presented either in the text
or in Appendix 1. Critical to understanding the rise of the “governmental
sphere” is the development of networks in Britain which were interested in
the practice of governance. These biographies provide important context to
help understand the nature and origins of the networks.

Methods and Sources
Even with full access to the original consultants’ own and official records, what
is critical is a frequently unrecorded story. The arguments at the time, over the
proposals, conclusions, implementation and value received, between
Departmental heads and Ministers, and with agencies, trade unions and local
authorities, tended not to be filed [in the archives] if they would cause embar-
rassment. (Alcon Copisarow, November 7, 2010,161 Worldwide Managing
Director, McKinsey & Co. (1966–1976), senior UK civil servant (1942–1966))
  Introduction  33

Attention in this book is focused on the largest consultancy firms; smaller

firms and individual management consultants are largely excluded from the
enquiry. There is simply insufficient space to give attention to them all. This
has important repercussions for the conclusions reached. Small firms and
individual consultancy practitioners form a substantial component of the
consultancy industry, and the power dynamics between these agents and their
clients is substantially different from those between clients and large, presti-
gious firms.162
This book relies heavily on five varied and distinct types of primary source:
archival; oral history; gathered quantitative data; contemporary newspapers,
company publications and trade reports; and official government reports. Each
comes with their own challenges. For example, archival (either state or private)
records may be incomplete or selective; oral histories can be incorrect or delib-
erately misleading; quantitative analysis necessitates assumptions to mask the
lack of comprehensiveness in the datasets; contemporary newspaper articles,
company publications, and trade reports are unlikely to be wholly unbiased in
their reporting; and official government reports, similarly, often have political
agendas to meet. Yet I argue that the sum value of using these sources collec-
tively far outstrips their challenges. These challenges are nonetheless important
to acknowledge and address, and so below I consider each in turn.
For archival sources, my main focus has been on the official archives at the
National Archives in Kew (in particular, cabinet papers and specific depart-
mental papers). My initial methodological approach involved searching the
digitised records (which also gives returns for other archives such as local gov-
ernment records offices, university archives, or certain organisations, such as
the Tate) for terms such as “consultancy,” “consultants,” “management consul-
tants,” and variations thereof. This returned nearly 2000 results and, for fear
of missing out on an important discovery, I was thorough in checking each
result. It is for this reason I have been able to construct the aforementioned
database of consultancy assignments. From these 2000 results, I was able to
hone in on the most relevant files, consulting each in turn. Of course, by dig-
ging deeper into the archival materials more names, files, or references were
unearthed which would lead me to consult further files in turn. As I outline
below, however, such an approach did not seem sufficiently comprehensive
given the new historical terrain which was being explored: several other archi-
val institutions were consulted too.
An additional reason for this was that the archival sources of the National
Archives appear to have been somewhat sanitised. Alcon Copisarow, who led
several state assignments for the American consultancy firm McKinsey & Co.,
has viewed what remains of the documentation of his work in the National
34  A. E. Weiss

Archives and notes substantial omissions, as his quote above demonstrates. As

his quote demonstrates, this particularly relates to any documents which may
have embarrassed the government or state officials.163 By comparison, my
review of management consultancy assignments in the Irish National Archives
found in-depth descriptions by state officials of heated arguments and clashes
with management consultants. For example, Brendan Earley, a senior official
in the Department of Justice in Ireland, wrote detailed notes to his colleagues
(and to himself ) on the actions of Michael McNamara, Partner-in-charge of
Stokes, Kennedy, Crawley’s, during the firm’s 18-month-long project on the
reorganisation of the operating structure of the Garda Siochana. One memo
recalls how in one meeting:

Mr McNamara’s manner was abrupt and unfriendly. When we were discussing

the need for the application of cost-benefit principles…Mr McNamara’s reply
was “are you aware of the up-to-date thinking on cost-benefit?” but did not
expand on this implication. (I have since ascertained from the Department’s
Cost Accountant that there has been no radical change in thinking in this area
recently.) Long before that meeting I had come to the conclusion that the con-
sultants were incompetent and that their examination and recommendations
would be of no value.164

Similarly, my visit to the National Archives of Scotland found correspon-

dence between consultants and civil servants engaging in social and personal
communiqués including arranging joint holiday plans along with their
partners.165 Sadly, no such personal correspondence was found from my
­considerable trawl through the National Archives in Kew, though fascinating
material still exists of a more formal nature; outline project terms of reference,
correspondence regarding commercial arrangements, though only occasion-
ally the actual project reports themselves. The lack of specific details on the
actual work of the consultants—what they intended to do, how they did it,
problems they encountered, and so forth—is, however, a significant impedi-
ment to this book. Where available, I have included such details throughout
this book to give a sense of the day-to-day realities of consulting in postwar
Britain. However, at best this book can only aim to give an indication of the
work of the consultants; by contrast, there is more extant material on reac-
tions to consulting contributions from politicians and civil servants, as well as
the reasons for their employment.
In this pursuit of breadth and depth, this book has been generated through
visiting many other archives across the United Kingdom also, including the
Bank of England, Oxford University, Bradford University, Churchill Archives,
  Introduction  35

LSE Archives, Manchester People’s History Museum, and the Warwick

Modern Records Centre—as well as accessing professional services firms’
archives, such as those of McKinsey & Company, in the United States. In
addition, a visit to the New York City Municipal Archives enabled a transat-
lantic point of reference to this research, uncovering dozens of studies for
New  York City undertaken by McKinsey & Company, Booz, Allen &
Hamilton, and the BCG in this period. In each archival visit, the value of
digitised indexes for archives has been made abundantly clear; every archival
visit of mine, where possible, was preceded with an online search of relevant
files using key consultancy-related search terms. Management consultancy, to
date, has not generated a rich vein of archival research and so there is great
value to be had in mining as many archives as possible.
Consequently, considerable research has also been based on over 30 inter-
views and conversations with consultants, senior politicians (including secre-
taries of state and a prime minister), and state officials of the time. All
interviews were conducted in adherence to research-related ethical consider-
ations. Regarding methodological approaches, attention must be drawn to the
fact that these interviews were from a necessarily self-selecting pool of indi-
viduals. Whilst I endeavoured to select interviewees with rigour, the very
nature of interviews limits this. In terms of selecting civil servants and politi-
cians for interviews, David and Gareth Butler’s British Political Facts and other
reference texts were invaluable in naming key individuals in the period.166 For
selecting consultants, this was done through a combination of spotting names
appearing in source material and word-of-mouth (essentially, consultants rec-
ommending I speak to other consultants—thereby reinforcing any “network”
effects). A combination of Who’s Who, personal internet sites, and social media
channels such as LinkedIn might then provide me with contact details for
these individuals (if, of course, they were still alive or able to be interviewed
freely). Whether individuals chose to respond to my request for interviews—
which involved a standard script regarding the nature of the research, my
institutional affiliation, and the method I would employ (telephone conversa-
tion or face-to-face meeting)—was entirely up to them. I was, during this
process, reminded of Anthony Sampson’s observation in 1962 that almost any
senior figure in Britain he sought to interview granted him a hearing.167 I, on
the other hand, approached over 100 individuals for interview and had a suc-
cess rate of slightly less than one in three (which, before rereading Sampson, I
felt was a rather good return). Once an interview took place (sometimes
recorded electronically, other times not—for instance, a number of environ-
ments forbade this), I would then write this up and share with the interviewee
to check for any factual errors.
36  A. E. Weiss

It is also worth noting that of the interviews which did take place, a num-
ber took place in the gentlemen’s member clubs of “Clubland” in Pall Mall, or
similarly “elite” establishments. This gives an indication of the types of envi-
ronments and networks which consultants and civil servants fraternised in.
Copisarow reminisced that in 1971 he gained a high-profile assignment for
McKinsey to review the management structure of Hong Kong whilst at the
Athenaeum Club—the future governor of the province was a fellow Club
member and approached Copisarow for help.168
As mentioned, to give a sense of the backgrounds of the key individuals of
this history, biographies of all interviewees are included as an Appendix. I am
particularly grateful for the time and hospitality of all those interviewed. (All
dates, location, and format of interviews are included in the endnotes.) There
are of course problems associated with oral history: of accuracy, bias, and
misrepresentation.169 As such, oral histories are checked against official archi-
val records or newspaper accounts as far as possible—these are reflected in the
endnotes. In a bid to reconstruct this forgotten history the drawbacks of oral
history are surely outweighed by the humanising effect it can provide.
It is hoped that the quantitative data compiled in this book will substan-
tially enrich the scholarship on management consultancy in two ways. First,
since the emergence of management consultants operating in the machinery
of the state, several official government reports have tried and failed to quan-
tify the scale and cost of public sector consultancy. The 1994 Efficiency Unit
Report, which cost £210,000, concluded that “mapping this unchartered ter-
rain was not a straightforward process, since we discovered that many
Departments and Agencies did not hold information on their use of external
consultants.”170 The report could only provide details of public expenditure
on MCA members since 1985.171 This book, using the archives of the MCA
(which presumably the Efficiency Unit did not request access to—my review
of the MCA’s archives over the period of the report shows no correspondence
requesting access), has succeeded in reconstructing all state activity by MCA
firms from 1963 to 2013, and I have provided estimates for total public sector
consultancy expenditure in this period too (see Fig. 1.1). This longitudinal
reconstruction of expenditure on consultancy has implications for historical
and contemporary understandings of the multi-billion pound consultancy
industry. The openness and transparency of the MCA in this respect is a
source of particular gratitude; their archives have not been consulted for
nearly 25 years, and never with a specific focus on state assignments.
(Incidentally, the MCA initially did not feel it had an archive worthy of his-
torical enquiry and was kindly concerned that my quest for material would be
in vain. This emphatically has been proved not to be the case.) The data
  Introduction  37

unearthed from the MCA archives are even more significant when one
considers the well-acknowledged secrecy of the management consultancy
industry.172 Highlighting this point, this book has also benefitted greatly from
the recorded oral histories within McKinsey & Company’s archive. But as Bill
Price—keeper of the firm’s archives—has noted, with the exception of the oral
histories the archives have been entirely purged of client-sensitive informa-
tion.173 However, there are important caveats to be made with regard to the
MCA data. The MCA has never been wholly representative of the British
consultancy industry (see notes to Fig. 1.1), and with the exception of AT
Kearney, none of the major American consultancy firms operating in Britain
have been members of the MCA. Thus whilst the MCA figures can be taken
as a broad guide to the state of the UK consultancy industry, they are at best
a proxy. This has implications in limiting our understanding of the generation
of consultancy firms missing from the MCA—the Americans. These limita-
tions must be kept in mind whenever MCA figures are quoted, not just in this
book, but in government, academic, and popular publications too.174
The second major contribution to academic enquiry into the state’s relation-
ship with external agents is found in tables in Appendix 2. Here a selection of
consultancy assignments in a variety of state bodies is provided. No database of
this kind exists elsewhere, and the assignments included are merely a selection
of the database that I have assembled through substantial archival research and
a combination of the other primary sources mentioned. It is hoped that this too
will be useful for scholars of the subject, highlighting the extent of consultancy
work in the period, as well as offering substantial opportunities for in-depth
case study analysis. Again, though, there are important caveats to make regard-
ing the database. State recording of consultancy projects was most detailed
during the 1960s and 1970s, as responsibility for this rested with a single body,
the CSD. However, when this was abolished in 1981 recording diminished in
quality until it formally ceased in 1987 in any centrally co-ordinated manner,
until restarting in the 2010s.175 As such, the database is not a comprehensive list
of all state-consultancy assignments; it is merely as comprehensive a list as pos-
sible of all the recorded state-consultancy assignments which my research has
uncovered. For example, many of the assignments included in the database are
for central government departments. This is not because the majority of public
sector consultancy work was for government departments in this period. In
fact, much more work was undertaken for local authorities, the NHS, arms-
length bodies, and the nationalised industries. However, central government
work was internally recorded by the civil service whereas management consul-
tancy work in ancillary bodies was not. Work in these central bodies has also
been registered in government archives and elicited the most press attention. It
38  A. E. Weiss

is therefore central government assignments which have been easiest to recover

and their histories to reconstruct. Contemporary publications, newspapers,
and journals have also been consulted extensively to support or challenge, as
well as to enhance the understanding of the other sources used. Archives have
also been used to populate the database, but the “thirty-year rule” inevitably
means our understanding will increase with time. Finally, as public sector
expenditure grew in scale throughout the twentieth century, the emergence of
supervisory bodies such as the Public Accounts Committee and NAO fre-
quently reviewed the work of consultants. Their data, and conclusions, provide
an important input into this history.

Notes
1. E. F. L. Brech, A. W. J. Thomson, and J. F. Wilson, Lyndall Urwick, Management
Pioneer: A Biography (Oxford: Oxford University Press, 2010), 119.
2. Ibid., 129.
3. Management Consultancies Association, The Definitive Guide to the UK
Consulting Industry 2009: Trends from 2008 and Outlook for 2009 (London:
Management Consultancies Association, 2009), 42.
4. National Audit Office, Central Government’s use of Consultants (London:
HMSO, 2006), 5.
5. Tom Clark, “Total Public Spending, 2008/9,” The Guardian; May 17, 2010.
Accessed November 12, 2014, http://www.theguardian.com/news/dat-
ablog/2010/may/17/uk-public-spending-departments-money-cuts
6. House of Commons Committee of Public Accounts, Central Government’s
Use of Consultants, (London: The Stationery Office Limited, 2007), 3.
7. Brech et al., Lyndall Urwick, 123.
8. See David Edgerton, Warfare State: Britain, 1920–1970 (Cambridge:
Cambridge University Press, 2006), 109.
9. David H. Maister, Charles H. Green, and Robert M. Galford, The Trusted
Advisor (New York: Free Press, 2000).
10. Author calculations based on data returns in Management Consultancies
Association archives, Endex Archives, Ipswich (hereafter MCA). Boxes 22,
23, 24.
11. The former Chancellor of the Exchequer, Denis Healey felt consultants
working in the public sector were “making money out of suckers,” cited in
Craig and Brooks, Plundering the Public Sector: How New Labour Are Letting
Consultants Run Off with £70 Billion of Our Money, 24; the journalist Johann
Hari called management consultancy a “scam” in The Independent, August
20, 2010; and political scientists such as R.A.W. Rhodes have claimed that
consultancy has “hollowed-out” the British state, covered in Dennis
  Introduction  39

Kavanagh, British Politics, 5th ed. (Oxford: Oxford University Press, 2006),
53–63. Most recently, the journalist Jacques Peretti claimed management
consultants were “cashing in on austerity” in The Guardian, October 17,
2016. Accessed November 28, 2016, https://www.theguardian.com/busi-
ness/2016/oct/17/management-consultants-cashing-in-austerity-public-
sector-cuts. Peretti also starred in a BBC documentary on the topic: Who’s
Spending Britain’s Billions?, October 18, 2016.
12. Figures from Management Consultancies Association, The Definitive Guide
to the UK Consulting Industry 2009, 11; For more on the “new elite” in
British society, see: Mike Savage, Fiona Devine, Niall Cunningham et al., “A
New Model of Social Class: Findings from the BBC’s Great British Class
Survey Experiment,” Sociology 47, 2 (2013): 234. Throughout this research,
the terms “UK” and “British” are used interchangeably.
13. This is acknowledged to have “taken-off ” since the 1990s. See Matthias
Kipping and Timothy Clark, The Oxford Handbook of Management
Consulting (Oxford: Oxford University Press, 2012), 10.
14. Rarely a day goes by when the work of management consultants is not
reported in the popular media. For instance: Tony Paterson and Leo
Cendrowicz, “Germany calls in US management consultancy firm for help
with refugee crisis,” The Independent, September 22, 2015; Bjorn Crumps,
“Retail Banks Are Pinning Growth Hopes on Technology,” The Guardian,
October 7, 2014.
15. Based on author-collated database of consultancy assignments. Sample out-
puts from the database are presented as tables throughout this book. It is
hard to say definitively that every local authority has been supported by
consultants as the data is incomplete; however, based on a sample, it seems
extremely likely that this is the case.
16. For pre-war social welfare see: Geoffrey B. A. M. Finlayson, Citizen, State,
and Social Welfare in Britain 1830–1990 (Oxford: Clarendon Press, 1994).
For more on the warfare state see Edgerton, Warfare State: Britain,
1920–1970.
17. See The National Archives, Kew (hereafter TNA): MH 137/427, “Health:
management consultants’ work for minister”; TNA: MH 137/428, “Health:
management consultants’ work for minister.”
18. Ivan Fallon, The Paper Chase: A Decade of Change at the DSS (London:
HarperCollins, 1993), ix.
19. TNA: AN 18/1013, Privatisation: McKinsey report, “Building a commer-
cial organisation for Railtrack.”
20. Michael Barber, Instruction to Deliver: Fighting to Transform Britain’s Public
Services, Rev. ed. (London: Methuen, 2008).
21. Gill Plimmer, “Bids to Run Prison Services Worth £100m,” Financial Times,
December 12, 2013. Accessed October 10, 2014, http://www.ft.com/cms/
s/0/03645db6-618e-11e3-916e-00144feabdc0.html#axzz3FLrvRZQR
40  A. E. Weiss

22. NAO, The Role of Major Contractors in the Delivery of Public Services
(London: The Stationery Office, 2013), 10.
23. McKinsey & Co., Achieving World Class Productivity in the NHS 2009/10 –
2013/14 (Department of Health, 2009), 106.
24. NAO, Major Contractors, 10; Rich Benton, telephone interview with author,
September 29, 2014.
25. Anthony Sampson, Anatomy of Britain (London: Hodder and Stoughton,
1962), 1.
26. Ibid., 202.; Though Edgerton has noted it was not mentioned that Ministry
of Aviation was a large defence spender in Warfare State, 46.
27. Anthony Sampson, The Changing Anatomy of Britain (London: Hodder and
Stoughton, 1982).
28. Anthony Sampson, Who Runs this Place? (London: John Murray), 2004,
121.
29. Ibid., 129.
30. Hugh Heclo and Aaron B.  Wildavsky, The Private Government of Public
Money: Community and Policy inside British Politics (London: Macmillan,
1974), 3–8.
31. Ibid., 60.
32. Ibid., 44.
33. Ibid., 8–9.
34. These influences are described in Peter Hennessy, Whitehall (London: Secker
& Warburg, 1989), xvi.
35. Hennessy, Whitehall, 1–5.
36. Martin J.  Wiener, English Culture and the Decline of the Industrial Spirit
(Cambridge: Cambridge University Press, 1981); Corelli Barnett, The Audit
of War: The illusion and reality of Britain as a great nation (London: Papermac,
1987).
37. Hennessy, Whitehall (1989) 11; 687–88.
38. Ibid., 120.
39. Peter Hennessey, Whitehall (London: Pimlico, 2001 edition), 577.
40. Hennessy, Whitehall (1989), 263.
41. Hennessy, Whitehall (2001), 414, 530.
42. Jim Tomlinson, The Politics of Decline: Understanding Postwar Britain
(Harlow, England: Longman, 2000), 25.
43. Hugh Pemberton, Policy Learning and British Governance in the 1960s
(Basingstoke: Macmillan, 2004).
44. Ibid.
45. Edgerton, Warfare State, 5.
46. Ibid., 192–3.
47. Ibid., 112.
48. Ibid., 83.
49. Glen O’Hara, From Dreams to Disillusionment: Economic and Social Planning
in 1960s Britain (Basingstoke: Palgrave Macmillan, 2007), 53.
  Introduction  41

50. Rodney Lowe, The Official History of the British Civil Service. Vol 1: The
Fulton Years, 1966–81 (London: Routledge, 2011), 49.
51. Ibid., 36.
52. Ibid., 86.
53. Ibid., 46.
54. Jon Davis, Prime Ministers and Whitehall 1960–74 (London: Hambledon
Continuum, 2007).
55. Michael Burton, The Politics of Public Sector Reform: From Thatcher to the
Coalition (Basingstoke: Palgrave Macmillan, 2013), 112.
56. Anthony King and Ivor Crewe, The Blunders of Our Governments (London:
Oneworld, 2014).
57. Christopher Hood and Ruth Dixon, A Government that Worked Better and
Cost Less? (Oxford: Oxford University Press, 2015), 80.
58. Anthony Seldon. and Jonathan Meakin, The Cabinet Office, 1916–2016.
The Birth of Modern Government (London: Biteback Publishing, 2016).
59. Ibid., 218.
60. David Runciman, “No Exit,” London Review of Books, May 23, 1996, accessed
July 17, 2014, http://www.lrb.co.uk/v18/n10/david-runciman/no-exit
61. Thomas Hobbes and Richard Tuck, Leviathan, Rev. ed. (Cambridge:
Cambridge University Press, 1996), 120–21.
62. Subsequent liberal theorists popularized this: the “night-watchman state.”
Isaiah Berlin, The Proper Study of Mankind (New York: Farrar, Strauss and
Giroux, 2000), 1999.
63. John Micklethwait and Adrian Wooldridge, The Fourth Revolution: The
Global Race to Reinvent the State, ebook loc 321.
64. Bernard Bosanquet, The Philosophical Theory of the State, Ed. 2. (London:
Macmillan, 1910), 125.
65. S. J. D. Green and R. C. Whiting, The Boundaries of the State in Modern
Britain (Cambridge: Cambridge University Press, 1996), 1.
66. Jose Harris, “Political Thought and the State,” in The Boundaries of the State
in Modern Britain, ed. S.J.D Green, Whiting, R.C., (Cambridge: Cambridge
University Press, 1996), 15–41.
67. For more on Hobbes and Bentham, see Quentin Skinner, “A Genealogy of
the Modern State,” Proceedings of the British Academy 162 (2008): 329–58.
68. L. T. Hobhouse, The Metaphysical Theory of the State: A Criticism (London:
George Allen & Unwin Ltd., 1918), 75–76.
69. Ralph Miliband, The State in Capitalist Society (New York: Basic Books,
1969), 66–67.
70. Peter B.  Evans, Dietrich Rueschemeyer, and Theda Skocpol, Bringing the
State Back In (Cambridge: Cambridge University Press, 1985), 28.
71. Timothy Mitchell, “The Limits of the State: Beyond Statist Approaches and
Their Critics,” The American Political Science Review 85, no. 1 (1991): 77.
42  A. E. Weiss

72. Mark Bevir and R.A.W.  Rhodes, The State as Cultural Practice (Oxford:
Oxford University Press, 2010).
73. Patrick Joyce, The State of Freedom (Cambridge: Cambridge University Press,
2013), 18.
74. Jens Bartelson, The Critique of the State (Cambridge: Cambridge University
Press, 2001), 149–81.
75. Christopher D.  McKenna, The World’s Newest Profession: Management
Consulting in the Twentieth Century (Cambridge; New  York: Cambridge
University Press, 2006), 80–110.
76. Christopher Hood and Michael Jackson, Administrative Argument
(Aldershot: Dartmouth, 1991), 19–24.
77. R.A.W. Rhodes, “The Hollowing out of the State,” The Political Quarterly
65, no. 2 (1994): 138–51; Herman Bakvis, “Advising the Executive,” in The
Hollow Crown: Countervailing Trends in Core Executives, ed. Patrick Weller,
Bakvis, Herman, Rhodes, R.A.W., (London: Macmillan, 1997), 84–125;
Graeme Hodge and Diana Bowman, “The ‘Consultocracy’ the Business of
Reforming Government,” in Privatization and Market Development
(Cheltenham: Edward Elgar, 2006), ebook loc Chap 6.
78. Simon Jenkins, Thatcher and Sons (London: Penguin, 2007), 308.
79. Michael Mann, “The Autonomous Powers of the State,” Archives européennes
de sociologie 25 (1984): 185–213.
80. Michel Foucault and Alan Sheridan, Discipline and Punish (London: Allen
Lane, 1977).
81. John Rawls, A Theory of Justice, Rev. ed. (Oxford: Oxford University Press,
1999).
82. Mann, “The Autonomous Powers of the State,” 185–213.
83. Even cultural historians such as David Kynaston are still bound by the elec-
toral cycle. See: David Kynaston, Austerity Britain, 1945–1951 (London:
Bloomsbury, 2007); Recent studies of public sector reform continue to focus
on political administrations. See: Burton, The Politics of Public Sector Reform
(Basingstoke: Palgrave Macmillan, 2013). As Frank Trentmann has argued,
this may well reflect the lack of “cross-fertilization” of disciplinary practices
in British studies: Frank Trentmann, “Materiality in the Future of History:
Things, Practices, and Politics,” Journal of British Studies 48 (April 2009):
283–307.
84. A reimagining of the German philosopher Jürgen Habermas’ broad concept
of the “public sphere” is influential here. For Habermas, a critical develop-
ment of the modern European state was the emergence of “the bourgeois
public sphere … a sphere of private people come together as a public [to
discuss issues of state authority],” which eventually led to the “modern social
welfare state” (Habermas was writing in 1962). By way of contrast with the
“governmental sphere,” however, Habermas’ theory was largely disinterested
in institutions and their influences. See Jürgen Habermas, The Structural
  Introduction  43

Transformation of the Public Sphere: An Inquiry into a Category of Bourgeois

Society (Cambridge: Polity, 1989), 27.
85. David Marsh, Matthew Hall, “The British Political Tradition and the
Material-Ideational Debate,” The British Journal of Politics and International
Relations, 2015, 4, doi: https://doi.org/10.1111/1467-856X.12077; R.  A.
W. Rhodes, Everyday Life in British Government (Oxford: Oxford University
Press, 2011), 15.
86. Ibid., 235.
87. Hood and Dixon, A Government that Worked Better (Oxford: Oxford
University Press, 2015), 38.
88. Edgerton, Warfare State, 146.
89. Peter Hennessy et al., “Routine Punctuated by Orgies,” Strathcylde papers on
government and politics (1985), 6–17.
90. T. R. Gourvish, British Railways, 1948–73: A Business History (Cambridge:
Cambridge University Press, 1986), 479; ibid., 368–74.
91. Geoffrey K.  Fry, Reforming the Civil Service: The Fulton Committee on the
British Home Civil Service of 1966–1968 (Edinburgh: Edinburgh University
Press, 1993), 57–58; Charles Webster, The Health Services since the War,
Volume II: Government and Health Care; the National Health Service 1958–
1979 (London: The Stationery Office, 1996).
92. Duncan Campbell-Smith, Follow the Money: The Audit Commission, Public
Money and the Management of Public Services, 1983–2008 (London: Allen
Lane, 2008), 48–50.
93. Denis Saint-Martin, Building the New Managerialist State: Consultants and
the Politics of Public Sector Reform in Comparative Perspective (Oxford;
New York: Oxford University Press, 2000), 72.
94. Kevin Theakston, The Labour Party and Whitehall (London: Routledge,
1992), 113.
95. Saint-Martin, Building the New Managerialist State: Consultants and the
Politics of Public Sector Reform in Comparative Perspective, 94.
96. Matthias Kipping, Saint-Martin, Denis, “Between Regulation, Promotion
and Consumption,” Business History 47, no. 3 (2005): 459.
97. Saint-Martin, Building the New Managerialist State, 30.
98. Paul Pierson, Politics in Time: History, Institutions, and Social Analysis
(Princeton, N.J.; Oxford: Princeton University Press, 2004).
99. Saint-Martin, Building the New Managerialist State, 108.
100. Sampson, The Essential Anatomy of Britain, 37; Heclo and Wildavsky, The
Private Government of Public Money, 1–3; Ferdinand Mount, The New Few
Or A Very British Oligarchy (London: Simon & Schuster, 2012), 176.
101. Edgerton, Warfare State, 189.
102. Brian R. Fry and J. C. N. Raadschelders, Mastering Public Administration:
From Max Weber to Dwight Waldo, Third edition. (Washington, DC.: CQ
Press), 46.
44  A. E. Weiss

103. Alan McKinley, Chris Carter and Eric Pezet, “Governmentality, power and
organization”, Management & Organizational History 7, no.1 (2012): 3–15.
104. Mitchell Dean, Governmentality: Power and Rule in Modern Society, 2nd ed.
(London: SAGE, 2010), 24–30.
105. See in particular: Bruno Latour, Pandora’s Hope: Essays on the Reality of
Science Studies (Cambridge, Mass.; London: Harvard University Press,
1999); Reassembling the Social: An Introduction to Actor-Network-Theory
(Oxford: Oxford University Press, 2005).
106. See Anthony Giddens, The Consequences of Modernity (Cambridge: Polity,
1990).
107. McKenna, The World’s Newest Profession, 165–91.
108. Matthias Kipping, “American Management Consulting Companies in
Western Europe, 1920 to 1990: Products, Reputation, and Relationships,”
The Business History Review 73, no. 2 (1999): 190–91.
109. Michael R.  Weatherburn, “Scientific Management at Work: the Bedaux
System, Management Consulting, and Worker Efficiency in British Industry,
1914–1948.” Doctoral thesis. Imperial College, London (2014), 172.
110. Ibid., 64.
111. Edgerton, Warfare State, 146.
112. Hugh M.  Coombs, J.  R. Edwards, and Hugh Greener, Double Entry
Bookkeeping in British Central Government, 1822–1856, New Works in
Accounting History (New York: Garland Pub., 1997); Dominic Wring, The
Politics of Marketing the Labour Party (Basingstoke: Palgrave Macmillan,
2005); D. Alan Orr, Treason and the State: Law, Politics and Ideology in the
English Civil War (Cambridge: Cambridge University Press, 2002).
113. William W. Allen, “Is Britain a half-time country, getting half-pay, for half-­work
under half-hearted management,” The Sunday Times, March 1, 1964, 15–16.
114. “Another difficult time expected,” Financial Times, January 10, 1977, 1.
115. David Craig and Richard Brooks, Plundering the Public Sector (London:
Constable, 2006), 1–5.
116. House of Commons Committee of Public Accounts, Central Government’s
Use of Consultants (London: The Stationery Office Limited, 2006–7), Rev. 2.
117. “The management consultancy scam,” The Independent, August 20, 2010;
“Masters of illusion: The great management consultancy swindle,” The
Independent, September 17, 2009; “Public sector ‘to recruit 200 consultants
on up to £1000 a day,’” The Daily Telegraph, July 5, 2010.
118. Rosa Prince, “David Cameron attacks Labour’s ‘policy by PowerPoint,’” The
Daily Telegraph, May 12, 2008, accessed July 17, 2014, http://www.tele-
graph.co.uk/news/politics/labour/1950578/Labour-Tory-leader-David-
Cameron-attacks-Labours-policy-by-PowerPoint.html
119. Less hostile but nonetheless part of this broader literature is Anthony King
and Ivor Crewe’s history of major government blunders—see King and
Crewe, The Blunders of Our Governments.
  Introduction  45

120. National Audit Office, Central government’s use of consultants (London: The
Stationery Office, 2006); House of Commons Health Committee, The use of
management consultants by the NHS and the Department of Health (London:
The Stationery Office, 2009); National Audit Office, Central government’s
use of consultants and interims (London: The Stationery Office, 2010).
121. An abridged version of the report by the Treasury interdepartmental work-
ing party, “Code of the Practice on the Use of Management Consultants in
Government Departments,” is available in O&M Bulletin 21, no. 4 (HM
Treasury, 1966), 173–184. The second report was Seeking help from
Management Consultants (London: HM Treasury, 1990).
122. Thatcher met an MCA delegation on March 10, 1982. “Notes on a meeting
of the Public Sector Working Party”, 16 April 1982, MCA archives, box 34;
John Major, conversation with author at Churchill College, University of
Cambridge, November 26, 2010.
123. Ian Watmore, telephone interview by author, February 12, 2014. See
Appendix 1 for biography.
124. Kipping and Clark, The Oxford Handbook of Management Consulting, 1.
125. Ibid., 2.
126. J. Johnston, “The Productivity of Management Consultants,” Journal of the
Royal Statistical Society 126, no. 2 (1963): 237–49.
127. Michael Ferguson, The Rise of Management Consulting in Britain (Aldershot:
Ashgate, 2002), 134.
128. House of Commons debate, Clause 1.  – (Research Councils), January 20,
1965 vol 705 cc283; TNA: T224/2045, memo by the President of the Board of
Trade on “Consultancy Grants Scheme,” 1969 [exact date unknown].
129. Hal Higdon, The Business Healers (New York: Random, 1969).
130. Patricia Tisdall, Agents of Change (London: Institute of Management
Consultants, 1982), 157.
131. For the literature on consultancy more generally, see Timothy Clark and
Robin Fincham, Critical Consulting (Malden: Blackwell Publishers, 2002);
M.  Kipping and Lars Engwall, Management Consulting: Emergence and
Dynamics of a Knowledge Industry (Oxford: Oxford University Press, 2002);
McKenna, The World’s Newest Profession; Sheila Marsh, The Feminine in
Management Consulting: Power, Emotion and Values in Consulting Interactions
(Basingstoke: Palgrave Macmillan, 2009); Andrew Sturdy, Management
Consultancy: Boundaries and Knowledge in Action (Oxford: Oxford University
Press, 2009). The published literature devoted to consultancy in Britain con-
sists solely of Ferguson, The Rise of Management Consulting in Britain. The
work on consultancy in Britain’s public sector comprises of one book (which
is a comparative study of Britain, France and Canada and so is not even
wholly dedicated to Britain) and two articles: Saint-Martin, Building the
New Managerialist State: Consultants and the Politics of Public Sector Reform
in Comparative Perspective, Kipping, “Between Regulation, Promotion and
46  A. E. Weiss

Consumption: Government and Management Consultancy in Britain”, and

Christopher D. McKenna, “Mementos: Looking Backwards at the Honda
Motorcycle Case, 2003–1973,” in The Challenge of Remaining Innovative,
Steven Usselman et  al. (Stanford: Stanford University Press, 2009),
219–242.
132. See Clark and Fincham, Critical Consulting.
133. Alfred Kieser, “Managers as Marionettes?” in Management Consulting:
Emergence and Dynamics of a Knowledge Industry, ed. Matthias Kipping,
Engwall, Lars (Oxford: Oxford University Press, 2002), 14.
134. Highlighted in Walter Kiechel, The Lords of Strategy: The Secret Intellectual
History of the New Corporate World (Boston, Mass.: Harvard Business School
Press, 2010), 243.
135. Matthias Kipping, “Trapped in Their Wave: The Evolution of Management
Consultancies,” in Critical Consulting, 38.
136. Matthias Kipping, Kirkpatrick, Ian, “Alternative Pathways of Change in
Professional Service Firms,” Journal of Management Studies 50, no. 5
(2013): 791.
137. Ibid., 800.
138. “US consulting industry grows strongly to market size of $55 billion”, June
13, 2016, Consultancy.uk, last accessed 27 October 2016, http://www.con-
sultancy.uk/news/12172/us-consulting-industry-grows-strongly-to-market-
size-of-55-billion
139. Ibid; UK figures from author research.
140. Walter Kiechel, The Lords of Strategy: The Secret Intellectual History of the New
Corporate World (Boston, Mass.: Harvard Business School Press, 2010), 12.
141. Duff McDonald, The Firm: The Inside Story of McKinsey (London: Oneworld
Books, 2014), 12; ibid., 73.
142. McKenna, World’s Newest Profession, 80–110.
143. Daniel Guttman and Barry Willner, The Shadow Government, 1st ed. (New
York: Pantheon Books, 1976), 14–24.
144. “Numbers and Cost of Special Advisers”, House of Commons publications,
22 November 2007, col148WS.
145. Paul R.  Lawrence and Mark A.  Abramson, Paths to Making a Difference:
Leading in Government (Washington, DC.: Rowman & Littlefield, 2011).
146. Robert J. David, “Institutional change and the growth of strategy consulting
in the United States” in Kipping and Clark, The Oxford Handbook of
Management Consulting, 77.
147. Joe Flood, The Fires: How A Computer Formula, Big Ideas, And The Best Of
Intentions Burned Down New  York City (New York: Riverhead Books,
2010), 289.
148. Guttman and Willner, The Shadow Government, xiv.
149. McKenna, The World’s Newest Profession, 251.
  Introduction  47

150. The MCA, since its formation in 1956, remains the only trade association
for management consultancy firms in Britain. With strict guidelines for
entry, member firms have represented between 55 per cent and 75 per cent
of all management consultancy revenues in Britain during its existence. In
the absence of any universally accepted professional qualifications for man-
agement consultants in Britain, the MCA has played a key role in percep-
tions of the nature of management consultancy in Britain. Another trade
association for management consultants also exists—the Institute of
Management Consultants, formed in 1962—although this represents indi-
vidual consultants, not firms.
151. MCA, MCA Annual Report, 1986, MCA: box 95.
152. MCA Annual Reports, 1964 to 2013. Reports for 1964 to 1998 available in
MCA: box 95. More recent reports accessed on visit to MCA offices on July
4, 2014.
153. Fiona Czerniawska, “The UK Consulting Industry 2008: Trends from 2007
and Outlook for 2008,” (London: MCA, 2008).
154. Skocpol et al., “On the Road toward a More Adequate Understanding of the
State,” in Bringing the State Back In, 347–66; for Bentham’s views see
Skinner, “A Genealogy of the Modern State,” 325–70. As Jose Harris has
argued, most Britons would agree with Bentham’s belief that the state is the
government of the day. See Jose Harris, “Society and the State in Twentieth-
Century Britain,” in The Cambridge Social History of Britain, 67.
155. A commonly accepted definition of the “public sector” is “any part of the
economy which is either under government ownership or contracted to the
government, or any institution that is heavily regulated or subsidised in the
public interest.” From Norman Flynn, Public Sector Management, 5th ed.
(London: SAGE, 2007), 2; using the public sector as a proxy for government
activity may be the norm but it is still a contentious practice, as described in
Joanna Innes, “Forms of ‘Government Growth’, 1780–1830,” in Structures
and Transformations in Modern British History, ed. David Feldman, Lawrence,
Jon, (Cambridge: Cambridge University Press, 2011),  99. For a more
general—and helpful—discussion of the problem of the public/private
dichotomy see Simon Susen, “Critical Notes on Habermas’s Theory of the
Public Sphere”, Sociological Analysis 5 no. 1 (2011): 38–42.
156. Quoted in McKenna, World’s Newest Profession, 182.
157. For more on this see Chap. 3.
158. The reorganisation is discussed in ibid.
159. See Chap. 4.
160. Much of the work of the Prime Minister’s Delivery Unit is detailed in the
memoirs of the head of the Delivery Unit, Michael Barber, who later joined
McKinsey & Company—Barber, Instruction to Deliver; the work of out-
sourcing firms, by contrast does not yet have its own history—yet.
48  A. E. Weiss

161. Alcon Copisarow, letter to author, November 7, 2010. See Appendix 1 for
biography.
162. For more on power and authority discourses in consultancy see Marsh, The
Feminine in Management Consulting, 243.
163. Alcon Copisarow, letters to author, between November 1, 2010 and May 1,
2011.
164. National Archives of Ireland (hereafter NAI): 2006/132/245. “Brendan
Earley memo to Mr Olden, March 25, 1976.”
165. See correspondence between Jimmy Robertson of the Scottish Office
Computer Service and Leon Fuller of Arthur Andersen between 1976 and
1980 in National Archives of Scotland (hereafter NAS): SOE 5/66. “Review
by Arthur Andersen and Company of Scottish Office Computer Services.”
166. For more on reference texts, see Bibliography.
167. Sampson, Anatomy of Britain.
168. Alcon Copisarow, interview with author, Athenaeum Club, London,
February 16, 2011.
169. For more on oral history, see Paul Richard Thompson, The Edwardians: The
Remaking of British Society, 2nd ed. (London: Routledge, 1992), xiv–xvi and
Elizabeth Tonkin, Narrating Our Pasts (Cambridge: Cambridge University
Press, 1992).
170. Efficiency Unit, The Government’s Use of External Consultants: An Efficiency
Unit Scrutiny (London: H.M.S.O., 1994), 1; ibid., 26. The lack of effective
archival filing may not seem immediately surprising, but it is worth reflect-
ing that the need to maintain a central register of consultancy assignments
was explicitly stated in a 1965 memorandum by a Treasury working party,
sent to all Permanent Secretaries, and one of the explicit tasks of the CSD—
set up in 1968—was to maintain such a database.
171. The MCA’s reaction to the report is chronicled in MCA: box 54. The
Executive Director, Brian O’Rorke, was interviewed on “The World
Tonight” on BBC Radio 4 on August 4, 1994. O’Rorke concluded that the
“report is … basically criticising the government and saying although
consultants do a great job it could be even better.”
172. See for instance David Craig, Rip-Of f ! (London: Original Book, 2005).
173. Bill Price, Keeper of McKinsey & Company’s archives, correspondence with
author between October 1, 2011 and May 1, 2011.
174. MCA member earnings are often quoted as representing the size of the UK
consultancy industry in contemporary publications. See for instance Gill
Plimmer, “Whitehall cuts consultancy bill by a third”, Financial Times, May
1, 2011, accessed April 12, 2015, http://www.ft.com/cms/s/0/4dcc56c4-
7433-11e0-b788-00144feabdc0.html#axzz3Sw4tZ5vq
175. “Changes in the public service since 1967,” Parliament.UK, accessed August
18, 2015, http://www.publications.parliament.uk/pa/ld199798/ldselect/
ldpubsrv/055/psrep07.htm
 2
Planning, 1960s–1970s

In September 1965, a Treasury inter-departmental working party published

a rather dry pamphlet entitled “The use of Management Consultants.”1
Circulated to all permanent secretaries by Laurence Helsby, Permanent
Secretary of the Treasury, the publication advised departments on “when
to use,” “how to use,” and “how to select” management consultants.2 The
response from departments was muted. For instance, C.H.A. Duke, Under
Secretary at the Ministry of Agriculture and Fisheries, expressed a degree of
scepticism at the proposals, whilst acknowledging that the Treasury were
encouraging the use of consultants. Duke commented to colleagues:

I think we are all agreed that at the present time we can see no scope for the use
of consultants in this Department. But on the other hand…there may be the
odd occasion where they would be useful. I would not be in favour of an explor-
atory approach to the firms concerned at this stage as we might well find they
get around our necks. I think the thing to do is to take note of the Treasury
philosophy on this…and [review this] every six months or so.3

Despite Duke’s underwhelming support, the document marked a turning

point in the British state’s relationship with management consultants. Whilst
since 1945 government had possessed its own in-house consultancy—the
Treasury “Organisation and Methods” team—the report was the first time the
state had proactively facilitated, encouraged, and recommended that depart-
ments consider the use of external consultants.4
The purpose of this chapter is to understand what caused this change by
tracing the development of this relationship from the 1920s through to the

© The Author(s) 2019 49

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3_2
50  A. E. Weiss

1970s, focusing on the critical decades of the 1960s and 1970s. In doing so,
five questions are addressed. Why did demand for management consultancy
services emerge from the state in the mid-1960s? For what reasons were
predominantly British consulting firms used up until the mid-1970s, over
foreign—and in particular—American ones? Why were these firms approached
for support, and what were the reactions by the state to the use of these external
agents? How does the state’s use of British consulting firms during this period
contribute to historiographical debates around planning, decline, and the
Americanisation of British approaches towards productivity? And finally, why
did this generation of British consulting firms lose market pre-eminence? To
answer these questions, this chapter covers the emergence of management
consulting and scientific management thought in Britain in the first half of
the twentieth century; highlights the extent to which the British generation
of consulting firms successfully established themselves in domestic and
international markets; demonstrates how the concept of planning—popular
in 1960s Britain—helped to facilitate the entry of consultants into the state
market; and shows how Harold Wilson’s distrust of the civil service gave
consultants an opportunity to embed themselves in the workings of the state.

 cientific Management and the Emergence

S
of Management Consulting in Britain
The advisers of a republic and the counsellors of a prince are undoubtedly in a
difficult position; for, unless they recommend the course which in their honest
opinion will prove advantageous to that city or to that prince regardless of con-
sequences, they fail to fulfil the duties of their office, while, if they recommend
it, they are risking their lives and endangering their position, since all men in
such matters are blind and judge advice to be good or bad according to its result.
(Niccolò Machiaevelli, The Discourses5)

As Machiavelli’s The Discourses demonstrates, the use of external advisory

services by the state goes back much further than the twentieth century. The
advice of Aristotle of Stagira to Alexander the Great on approaches towards
non-Greeks or the pronouncements coming out of the Orti Oricellari directed
at the late fifteenth-century Florentine rulers could be deemed early forerun-
ners of the work for states conducted by management consultants in the
twentieth century. In 1597, for instance, Francis Bacon wrote of the “insepa-
rable conjunction of counsel with kings.”6 There was not uniform support for
this state of affairs, however. Whilst Bacon praised the value which external
   Planning, 1960s–1970s  51

advisers brought through “the wise and politic use of counsel” in his essay “Of
Counsel,” he also acknowledged its drawbacks—especially “the danger of
being unfaithfully counselled.”7 Here, Bacon was invoking long-running sus-
picions of external advisers, warned of by both Aristotle and Erasmus. Thomas
Hobbes argued that accountability ultimately rested with the decision-maker
(king), not the counsellor. Machiavelli’s quote decried the misfortune that
may befall those who gave counsel. As the historian Christopher McKenna
has noted, “this pattern of pragmatic acceptance of the value of advisors,
twinned with persistent concerns over their intensely political nature, has
characterised the perception of professional and administrative expertise for
more than 400 years.”8
In Britain, the first recognisably professional (as opposed to merely coun-
selling) advice to the state occurred in the early eighteenth century when
Charles Snell was asked by Parliament to investigate the financial affairs of a
business belonging to a director of the South Sea Company.9 It is unsurprising
that this emergent use of external professional service coincided with increased
spending on the administrative functions of the newly formed Union of
England and Scotland.10 Following the Victorian “growth of government,”
engineers were frequently called upon by the state, highlighted by the indus-
trialist William Armstrong’s work in the ordnance factories.11 Around the
turn of the twentieth century the use of external experts became more com-
mon; William Beveridge joined the Board of Trade in 1908 in an advisory role
and efficiency experts were used in the rationalisation schemes of the interwar
years.12 The historian J.I. Grieves has shown that Eric Geddes, strongly influ-
enced by scientific and analytical management techniques, undertook several
independent consulting roles for the state both during the First World War
and in the 1930s for the Lancashire Cotton Corporation.13 In the 1940s
Stafford Cripps used consultants for a high-profile state-sponsored assign-
ment on efficiency in cotton mills, and there was use of consultants by the
Conservatives during the 1950s too.14 Michael Weatherburn has demon-
strated how British consultancy firms specialising in work measurement tech-
niques were used extensively by the Ministry of Aircraft Production, Ministry
of Supply, Royal Ordnance Factories, and National Filing Factories during the
Second World War.15 However, despite the development of a recognisably
professional management consultancy industry in Britain in the 1920s, what
differentiates the pre-1960s period and after is the formalisation of the use of
management consultants by the state in the 1960s. This use was no longer ad
hoc in nature; explicit processes and mechanisms were set up by the state to
facilitate the procurement of consultancy firms.
52  A. E. Weiss

To understand these developments, first one must trace the emergence of

consultancy. Consultancy first appeared in Britain when a number of indi-
vidual practitioners, primarily from engineering backgrounds, began to offer
“consultancy” services to businesses in the late nineteenth century; these—
such as the work of Geddes or the engineer Alexander Hamilton Church—
were largely concerned with increasing worker productivity and efficiency and
improving cost accounting in organisations. Church, for instance, reorgan-
ised the “costing and financial accounting methods” and improved the “man-
agement methods” of the B.&S. Massey Company in Manchester around the
turn of the century.16 State interest in scientific management reached new
heights in the First World War. On January 5, 1917, a Directorate of Labour
was established to co-ordinate the work of 400,000 unskilled and semiskilled
labourers. The Directorate was run by Colonel E.G. Wace, an arch adherent
of the principles of Frederick Winslow Taylor.17 Taylor, a mechanical engineer
from Philadelphia, enshrined the concept of “scientific management” in his
influential 1911 monograph The Principles of Scientific Management.18 This
was concerned with standardisation and improving production efficiency
through conducting shop-floor audits and incentivising workers through
rewards payments.
Despite this early interest in Taylorism in the First World War, a large body
of historiography has emerged which claims that in the interwar period,
British industry in general rejected Taylorism.19 The claim is made that whilst
Europe embraced Taylorism, Britain did not.20 British elites were supposedly
“antimodernist,” whilst trade unions were hostile to the concept.21 Yet the
emergence of consulting in the interwar period provides a stark challenge to
this received wisdom. The first recognisably professional consultancy outfit
was set up in London by the American-naturalised Frenchman Charles
Eugène Bedaux in the mid-1920s.22 Bedaux’s offering was firmly grounded in
the scientific management movement spearheaded by Taylor.23 The Bedaux
Company emerged against a backdrop of growing interest in management
theory highlighted by the Liberal Party’s Yellow Book of 1927 which called for
the formation of an institute of management, and the World Economic
Conference in Geneva (1927) where the concept of “rationalisation” was pro-
claimed as a revolutionary tool of systematic management.24 In this period a
number of British consultancy firms were set up, many with direct links to
Bedaux (see Fig. 2.1). One of the first of these (which did not have Bedaux
connections) was Harold Whitehead and Staff Limited, formed in 1929. The
Whitehead Company was concerned with salesmanship, sales management,
and marketing.25 One of the earliest known consulting assignments for a state
body was undertaken by the Whitehead Company for the Post Office in the
   Planning, 1960s–1970s  53

‘Big Four’

1920 Charles E. Bedaux

and Company
(Formed in the United
States in 1916, London
office opened 1926.)
1930

Production
Urwick Orr &
Engineering
1940 Partners
Associated Industrial (Formed in 1934 by
Consultants (Formed in 1934 by
Maurice Lubbock.
Leslie Orr – Manager Personnel
(Formed in 1938. The First Managing
of Sales at Bedaux since Administration
original Bedaux Director, Robert
1932 and Lyndall
company, but with all Bryson, was a (Formed in 1943 by
1950 Urwick.)
consultant at Bedaux.)
references to Bedaux Ernest Butten, Director
removed.) at Bedaux since 1936.)

Fig. 2.1  The origins of the Big Four. (Dates and connections derived from Kipping,
“American Management Consulting Companies”, 201–203)

company’s inaugural year, providing advice on business organisation and sales

training.26
During the 1930s, Bedaux left an indelible imprint on the development of
consulting in Britain. Inspired by the pioneering work on scientific manage-
ment by Taylor and Frank and Lillian Gilbreth, Bedaux set up his first consul-
tancy in the United States in 1916.27 Bedaux’s offering to American factories
became known as the “B unit”—a method which built on the Gilbreths’ con-
cept of rest allowance and standardised human labour into a single unit of
measurement.28 By measuring the output of workers, the “B unit” encouraged
factory managers to incentivise workers to maximise their output via a
payment-­by-results system.29 Pace the historiography on the resistance of
British industrialists to Taylorist techniques, Bedaux opened his first office in
London in 1926 at Bush House, Aldwych, and by 1931, 30 plants in the
British Isles had adopted the “B unit” system, rising to 225 plants in 1937.30
This represented a not inconsiderable penetration of plants: to contextualise,
between 1932 and 1938 there were an estimated 1400 plants in Greater
London.31
As we shall see, Bedaux is critical to the history of management consultancy
and the state in Britain because as Fig. 2.1 shows, by the 1960s each of the
four major British consulting firms had their origins in the Bedaux Company.
These firms—known collectively as the “Big Four”—dominated the consult-
ing market in Britain in the 1950s to the extent that in 1956 they accounted
for three-quarters of total British consulting revenues (estimated at £4m) and
54  A. E. Weiss

consulting staff (which totalled 1000).32 See Table A.1 for state-consulting
assignments undertaken by British firms during this period.
Politicians actively pursued policies for improving productivity after the
war using management consultants. In 1942 Stafford Cripps, when Minister
of Aircraft Production and a member of the wartime coalition, set up the
Production Efficiency Board and invited leading consultants of the day,
including Anne Shaw (who had set up the Anne Shaw Organisation consul-
tancy), to sit on its Council. The Board funded a £150,000 grants scheme for
businesses to use consultancy firms which continued until 1947.33 In 1947
Cripps, now serving in the Labour administration, also set up the British
Institute of Management, again inviting consultants such as Urwick to sit on
its first Council, which kept a register of all British consultancy firms and
encouraged industrial organisations to use them.34 Working in conjunction
with the Cotton Board, Cripps also instigated a high-profile project using the
British consultancy firm Production Engineering in the Musgrave cotton
mills in Lancashire. Its results, which led to an increase in production per man
hour by 39 per cent whilst reducing the number of operatives by 21 per cent,
were proclaimed across national newspapers as further evidence of the role
management consultants could play in increasing productivity in Britain. The
Times even expressly endorsed the use of consultants to generate further
improvements, with an editorial stating: “what is needed more than anything
else is a rapid increase in the number of persons with practical experience [in
this field]…there may be room here for a training scheme [with] which per-
haps the industrial consultants and the principal technical institutes might be
associated.”35
Despite the opposing claims of the historians Corelli Barnett, and Stephen
Broadberry and Nicholas Crafts, it is hard to argue that Clement Attlee’s
Labour government of 1945–1951 was not deeply concerned with achieving
economic efficiency.36 The state-sponsored use of British consulting firms in
this period which sought to increase productivity in the private sector demon-
strates this. Yet, with a change of government, state interest in management
consultancy in the 1950s seemed to cool, supporting the economic historian
Jim Tomlinson’s claims that the Conservatives had a rather sceptical approach
to “modernisation.”37 Nevertheless some notable work was undertaken by
management consultants in this period which shows that the influence and
standing of the profession continued to grow. In 1952 the Colonial Office
hired Urwick, Orr & Partners to reorganise—in its entirety—the government
and governance of Britain’s Singapore colony, which it had reclaimed from the
   Planning, 1960s–1970s  55

Japanese in 1945. Over two years and 29 reports, Urwicks advised on diverse
topics including foreign exchange control, the “formation of the department
of commerce and production,” receipt and payments procedures to govern-
ment, land and office revenue collection, an index of taxpayers, and electoral
registration.38 Urwicks also undertook an assignment for the British Transport
Commission to improve the morale and training of staff in the North Eastern
Region which lasted from 1960 to 1965.39 A consortium of firms from the
recently formed MCA (1956)—the trade association for management consul-
tancy firms in Britain which initially comprised of just the “Big Four” British
firms—was successful in winning a series of high-profile assignments for gov-
ernment bodies. As described in the Introduction, in the late 1950s, the con-
sortium carried out several studies into improving productivity in
administrative areas such as utilities and cleaning in a number of hospitals for
the Ministry of Health. The response from the Ministry was underwhelming.
The Minister of Health, Derek Walker-Smith, noted apologetically to Rolf
Cunliffe, Treasurer and Chairman of the Board at Guy’s Hospital (one of the
hospitals involved in the study), “As you know, I am keenly interested in all
activities which can promote efficiency in hospital services…[though] the
present exercise may not have produced all we should have liked.”40 Cunliffe
was not opposed to the use of consultants per se, merely concerned that the
“industrial experience” of the MCA consultants was not well tailored to
understanding hospital services.41 The project nonetheless highlighted the
MCA’s ability to make itself and its services known to key state officials.42
Indeed, in the seven years to 1963 the then nine MCA member firms recorded
over 178 different local authorities as their clients.43 Significantly though, no
substantial quantities of work were recorded for any central government
departments.
As we shall see, a key difference between the pre-mid-1960s period and
after is that in the latter period the state actively encouraged the use of man-
agement consultancy firms on a regular basis, whereas before it had done so
on a piecemeal one. In 1965 the Treasury released the aforementioned “Code
of the Practice on the Use of Management Consultants in Government
Departments,” and in 1968 a government department—the CSD—was
established with a remit to act as a conduit between government and manage-
ment consultancy firms.44 Thus the arrival of management consultancy into
the state was effectively facilitated and sanctioned in the turning point of the
mid-1960s.
56  A. E. Weiss

The Rise of the British Generation

I have the highest regard for the work of management consultants in this coun-
try.45 (Henry Brooke, Chief Secretary to the Treasury and Paymaster General
House of Commons, May 17, 1962)

Late on Valentine’s Day 1944, Charles Eugène Bedaux committed suicide

whilst under detention in Miami, Florida, on suspicion of treason.46 It was an
ignominious end to the life of one of the most significant characters in the
development of management consultancy not only in Britain, but globally. By
the mid-1960s, though in decline, the British generation of consultancies had
market pre-eminence, as Henry Brooke’s comment suggests. In 1967, the Big
Four accounted for around 76 per cent of the total MCA consulting revenues
but by 1974 this figure was down to 58 per cent and dropping.47 Nevertheless,
with regard to work for the state, the Big Four represented two-thirds of all
consulting assignments for state bodies (188 in total) in 1967, and as such,
attention focuses on these firms throughout this section (see Table 2.1).48
Amidst an era of “high-Keynesian” pursuit of demand-side measures to com-
bat perceived economic decline, the quest for improved industrial productivity
and competitiveness that Britain embarked upon in the 1960s was by no means
guaranteed to lead to the use of the British generation of management consul-
tants (or any management consultants, for that matter).49 But, though unno-
ticed by historians, management consultancy could position itself as the answer
to British decline because it was already a fast-growing and increasingly respected
industry. By 1962 a staggering 91 per cent of the 119 largest industrial compa-
nies in Britain (those with over £10 million issued capital) were clients of the
Big Four.50 In the same year the MCA Chairman Ernest Butten (of PA
Management Consultants) wrote in the Financial Times and The Times that:

Table 2.1  Income of the Big Four

Total income (UK and % of total MCA
overseas), £m income
Big Four 1967 1979 1984 1967 1979 1984
Associated Industrial Consultants 2.7 6.4 11.6 22 12 10
Personnel Administrationa 3.1 n/a n/a 25 n/a n/a
Production Engineering 1.7 4.8 5 14 8 4
Urwick, Orr & Partnersb 1.9 4.1 Defunct 15 8 Defunct
Total 9.5 15.3 16.6 76 27 14
Notes:
a
PA Management Consultants left the Management Consultants Association in 1975
b
Urwick, Orr & Partners was bought by Price Waterhouse for £500,000  in 1984.
Source: “Idealism was not enough,” Financial Times, June 25, 1984
   Planning, 1960s–1970s  57

The 1960 Economic Survey of the United Nations shows the UK’s annual rate
of growth from 1950 to 1959 at only 2.5 per cent. This is an intolerable state of
affairs – and an unnecessary one. Members of MCA firms know from experi-
ence what can be achieved in terms of increased output by the application of
modern management methods – and they know it is measured in terms of 10
per cent or 20 per cent, not in terms of 1 per cent or 2 per cent. To achieve this
goal, however, three things are needed. First a proper government plan for effi-
ciency and growth. Next, a genuine determination by management to set its
house in order. Then, a readiness on the part of organised labour to eliminate all
forms of restrictive practice.51

As the Chairman of the trade association of an up and coming industry,

Butten’s views carried some weight.52
Though Kipping has stressed the American origins of the Big Four, in prac-
tice these firms were at pains to point out their British identity and downplay
their transatlantic heritage.53 All Bedaux references were dropped when
Associated Industrial Consultants was formed in 1938.54 When representatives
of three of the Big Four firms addressed the Royal Commission on Trade
Unions and Employers’ Associations as expert witnesses in December 1966,
Brian Smith—Managing Director of PA Management Consultants—
emphasised that “[in the forty years since Charles Bedaux] British consultancy
has grown into an honoured profession…achieving results in a very much
more ethical manner than Bedaux did.”55 And in 1968, in disgust at the
American firm McKinsey & Co. being awarded an assignment at the bastion
of Britishness, the Bank of England, Eric Lubbock MP—a former Production
Engineering consultant—forced a debate in the House of Commons ques-
tioning why an American firm was chosen over a British one for the con-
tract.56 Whilst like all consulting firms the Big Four offered a portfolio of
services, the majority of their work was in “production” (47 per cent of com-
bined Big Four revenues in 1967) and “finance and administration” (22 per
cent of combined 1967 revenues)—see Table  2.3.57 The work which these
firms specialised in was very much born of their Taylorist and scientific man-
agement heritage. This contrasted sharply with the services delivered by the
consultancy firms of American and accountancy origins, strategic reorganisa-
tion, and computerisation, respectively. The question is therefore, why did a
particularly British form of consulting hold pre-eminence for some time in
the 1960s, as the country sought to address the problems of economic decline
which had entered the public consciousness in the 1950s? The answer has
much to do with the social context of the period. As Peter Mandler has writ-
ten: “The late 1950s and early 1960s were years of growing cultural division
58  A. E. Weiss

and national self-criticism.”58 It is important to note here that this was not
true of the 1940s (for examples of British self-confidence, one only needs to
look at the creation of nationalised industries or institutions such as the NHS,
British European Airways, British Transport Commission, National Coal
Board, British Iron and Steel Corporation, Festival of Britain, and Arts
Council of Great Britain in this period).59 And also, that this “growing…
national criticism” was a process. For much of this time, British consultants
were highly successful domestically and internationally; their fall from favour
should be attributed as much to the subtle nuances of perceived national
decline as to whether international competitors—especially American con-
sulting firms—were simply better than them.
This feeds into an important historiographical debate. Much—such as the
work of the economic historian Alan Booth—has been written on the extent
to which American ideas around productivity and scientific management
entered Britain in the first half of the twentieth century.60 More broadly the
“Americanisation” book has gained academic credence, and largely pinpoints
the Second World War as a turning point in growing American influence.61
Yet there is a subtle riposte to this, which has most likely been ignored as it
does not fit into the “declinist” narrative: by the early 1960s, British consult-
ing firms were highly successful internationally. By 1962, 37 per cent of the
top 100 largest American companies were clients of the eight—all British—
MCA member firms.62 And management consultancy as a sector contributed
£1.5m to Britain’s balance of payments through its overseas work. The work
of consultants gained notable media attention. Lyndall Urwick’s advice to the
US Army in 1938 that “continuous training” was needed to improve quality
and morale in the forces was featured in The New  York Times.63 In March
1964, the forecasts of Alec Houseman, a director at Production Engineering
Limited, that the Japanese food market (rising from an estimated market size
of $600 million in 1963) would soon be demanding more American foods
made US media headlines too.64 This is chronologically significant, because at
the same time as British government departments had begun looking to
American firms such as McKinsey & Company for international advice (see
Chap. 3), America was doing precisely the reverse.
Despite MCA restrictions prohibiting consultancy member firms from for-
mally advertising their services, the MCA—in its role as a trade association—
ensured consultancy was a well-promoted service.65 Letters to newspaper
editorials from directors of the Big Four, such as Ernest Butten’s aforemen-
tioned pieces in the Financial Times and The Times, attest to this.
The bewildering growth rates of the industry—averaging 13 per cent nomi-
nal growth per annum from the MCA’s foundation in 1956–1964, when total
   Planning, 1960s–1970s  59

MCA annual revenues stood at £9.2 million—attracted considerable positive

attention from parliamentarians.66 Significantly, this interest came from all
sides of the house. In 1962 the Conservative Roger Gresham Cooke pointedly
asked the Treasury Secretary Sir Edward Boyle: “would it not be advantageous
to the Government…to bring in outside management consultants?”67 Two
years later the Minister of Labour, Raymond Gunter (a Labour parliamentar-
ian), proclaimed his certainty that “the special expertise and the concentrated
attention which the consultant can offer to hard-pressed management can be of
vital importance in tackling problems of labour utilisation.”68 And in 1966 the
Liberal MP and former consultant Eric Lubbock urged the Minister of
Transport to appoint consultants to settle a pay dispute.69 On each occasion
members of the House were referring to the British generation of consultancy
firms, and the work they could do in either the nationalised industries or gov-
ernment departments (see Table A.1 for further examples of work undertaken).
These three incidents were far from isolated. Between 1964 and 1970, the use
of “management consultants” by government departments and bodies was dis-
cussed on no fewer than 32 separate occasions in debates in the Commons or
Lords; with one exception, always in positive terms.70 (The exception was when
in 1969 Keith Joseph (Conservative) attacked the President of the Board of
Trade’s “beloved management consultancy” in reference to the Board’s pro-
posed £15 million consultancy grants scheme.71 This would prove to be some-
what ironic as three years later as Secretary of State for Social Services Joseph
would hire the American consultants McKinsey & Co. to help devise a new
management structure for the NHS at a cost of £250,000—see Chap. 3.72)
British management consultants were more than willing to rise to the challenge
of reversing economic decline. As Hamish Donaldson was told at his training
sessions at Urwick, Orr & Partners in 1966:

A good consultant can go into any medium sized organisation, improve the
output and, at the same time, reduce costs by 10 per cent. A good consultant
can go into any Government (or quasi-government) organisation and improve
the output and, at the same time, reduce costs by 25 per cent.73

Consequently, even if the work which British consultancy firms undertook

did not carry the same prestige or weight as those of the American firms, these
firms were nevertheless well known to state officials. This is significant, because
as government policy became increasingly dirigiste in nature in the early
1960s, British consultants had a sufficiently well-regarded reputation to posi-
tion themselves as being not only relevant, but vital to the modernisation of
Britain.
60  A. E. Weiss

Putting Planning in the State

Government policy planning in the economic field—regardless of the political
party in power—is accepted these days as an essential function of modern gov-
ernment. It was not by chance that during the year under review there was a
marked increase in the work of member firms of the Association for government
departments. We regard this considerable expansion of work for government
departments and nationalised industries as a significant feature of the year’s
work.74 (MCA, Annual Report, 1965)

As Glen O’Hara has persuasively argued, “if there was one concept at the
heart of the raised expectations…of British politics in the 1960s, it was ‘plan-
ning’.”75 In many ways, the emergence of planning was the critical factor in
the rise of British consultancy firms as a tool of government policy, as the
MCA’s quote attests to. The overwhelming number of planning arrangements
developed in the space of a few years overstretched the existing machinery of
the state. Since Chancellor Selwyn Lloyd announced in his “little budget” of
July 1961 that “I am not frightened of the word [planning]…the time has
come for better co-ordination of various [government] activities,” a substan-
tial number of planning arrangements or planning bodies were erected in
bipartisan support for the concept.76 The tripartite National Economic
Development Council (1962), Hospital Plan (1962), Local Health and
Welfare Plan (1963), National Plan (1965), Housing Plan (1965), and numer-
ous regional plans and public expenditure surveys were all born amidst this
planning boom.77 The chronology of interest in planning is significant.
Existing accounts of the entry of management consultants into the state stress
the importance of the arrival of Harold Wilson at Downing Street.78 However
the fact that interest in planning pre-dates Wilson highlights how broader
trends and pressures in the period were greater than any political figures in
driving state reform and therefore the use of consultants.
Planning—described by the Department of Economic Affairs (DEA) as
“specific targets, agreed with unions and employers, to bring about consistent
growth”—was the bread and butter work of most members of the MCA.79
According to the MCA’s annual reports from 1963 and 1964, “the majority of
members’ work is concerned with the study of planning and organisation in
all levels of industry and commerce” and “over the last 35 years we have had
considerable success in co-operation with management and labour.”80 As
Tables 2.2 and 2.3 and the accompanying notes demonstrate, planning fea-
tured heavily in all aspects of the service lines undertaken by the British gen-
eration: five of the seven service lines they offered relating to “planning.” In
Table 2.2  Big Four company revenue split by service line as a % of MCA total (UK only), 1967
1967
Personnel and
Company development and Production Marketing Finance and management development
Big Four policy formation (%) (%) (%) administration (%) (%)
Associated Industrial 3 46 8 38 4
Consultants
Personnel 17 51 14 13 5
Administration
Production 16 52 11 13 8
Engineering
Urwick, Orr & Partners 20 35 12 22 11
Source: Collated, compiled and analysed by author. Annual company returns found in MCA: boxes 22, 23, and 24
Notes:
The MCA was the only trade association for British management consultancy firms in the twentieth century. In the 1960s it was estimated
to represent around 70 per cent of the total UK consulting industry, though this proportionately dropped to around 50 per cent in the
1980s and 1990s before rising to 70 per cent again in the 2000s. Source: MCA Annual Reports, 1962 through to 2007. Reports for
1962–1999 in MCA: various boxes; reports for 1999 onwards in MCA offices, 60 Trafalgar Square, London, and from 2014 onwards in
offices in 36–38 Cornhill, London
In the early 1960s, in a desire to break with their past image as productivity experts working on the shop-floor, three of the Big Four
changed their names. Associated Industrial Consultants became known as AIC, Personnel Administration became PA Management
Consultants (and later PA Consulting Group), and Production Engineering became P-E Consulting Group. By the late 1960s AIC had
merged with Inbucon to form Inbucon/AIC. PA Management Consultants left the MCA in 1975. Urwick Orr & Partners was bought by
Price Waterhouse for £500,000 in 1984. Source: “Idealism was not enough,” Financial Times, June 25, 1984
  Planning, 1960s–1970s 
61
 62 

Table 2.3  Big Four company revenue split by service line as a % of MCA total (UK only), 1974
1974
Management
A. E. Weiss

Organisation Marketing, Personnel information

development Production sales and Finance and management Economic and systems and
and policy management distribution administration and selection environmental electronic data
Big Four formation (%) (%) (%) (%) (%) studies (%) processing (%)
Associated 10 22 9 9 44 2% 4
Industrial
Consultants
Personnel 21 29 12 13 9 6 11
Administration
Production 8 42 7 11 11 5 15
Engineering
Urwick, Orr & 26 14 4 10 35 1 10
Partners
Source: Annual company returns found in MCA collated and analysed by author: boxes 22, 23, and 24
Definitions (Source: MCA Annual Report, 1974):
Company development and policy formation/organisation development and policy formation: development studies; long-range
planning; co-ordination and definition of management responsibilities; management counselling and development programmes;
financial planning; rationalisation of services and products; diversifications, acquisitions and mergers; trading and business appraisals
Production/production management: layout for production departments; selection of plant and equipment; material handling; product
design and value analysis; drawing office procedures and control; productivity and incentive schemes; work simplification and
measurement; labour cost control; production control and group technology; quality control; materials waste control; planned and
preventive maintenance including project management and tero-technology
Marketing/marketing, sales, and distribution: economic and market research, business forecasting; product planning and development;
pricing and profitability; sales organisation and control; sales promotion; distribution; organisation of retail and wholesale outlets;
warehousing, location and design; vehicle scheduling and determination of fleet size
Finance and administration: total financial controls—including management accounting and budgetary control systems, profit planning
and capital and revenue budgeting; financial ratios and models; capital investment evaluation; costing and estimating techniques;
organisation and method, including clerical procedure studies, office equipment evaluation and selection (see also Management
Information Systems)
Personnel management and selection: personnel policy and organisation; manpower planning; executive development and selection;
executive compensation programmes; salary and staff grading, productivity agreements; job evaluation and job description; industrial
and human relations and internal communication; job enrichment, work structuring; training needs analysis and training courses for
management, staff and operators, including the use of programmed learning; personnel advertising
Economic and environmental studies: urban and regional development planning; international economic research; analyses of
development economics; land use and transportation planning; reorganisation and development studies for individual industries; cost-
benefit studies and social analyses; environmental studies—physical, economic, ecological and sociological
Management information systems and electronic data processing: definition of information needs; reporting and control systems for all
functions of management; information services; computer feasibility studies and computer applications, including computer hardware
evaluation; provision of software; systems analysis and design; electronic data processing; data banks; real-time systems; process control
systems; operational research
  Planning, 1960s–1970s 
63
64  A. E. Weiss

this respect, the work of the consultants operated on two related, but distinct,
definitions of “planning.” The first was on a macro level. The Big Four, for
instance, sought to help improve the efficiency or output of the sectors in
which they support their clients through setting targets and agreed goals. The
second was on a micro level. The British consultants also support individual
organisations such as factories to increase their output through professionalis-
ing the operations of the organisation. It is the first of these definitions which
is the focus of this chapter.
It is also worth noting two other issues regarding the service lines. First, the
relative homogeneity of the Big Four. In 1967, their work was broadly split
along similar lines; only Associated Industrial Consultants appeared slightly
different, with less of a focus on “Company development and policy forma-
tion” than peers, and a greater emphasis on “Finance and administration.”
The second noteworthy point is how fluid the industry was. In the space of
just seven years, two new service lines appeared for the Big Four, and the com-
panies changed in nature. Production Engineering led the way in “Management
information systems and electronic data processing,” for instance, and
Associated Industrial Consultants radically increased its share of work along
the lines of “Personnel management and selection” to the detriment of its
share of “Production management” work. The Big Four, in short, offered fluid
and rapidly changing service lines.
The MCA Annual Report for 1965 noted with some pleasure that the list of
state assignments received in the past year was a direct result of the increased
emphasis on planning in government policy:

Government policy planning in the economic field – regardless of the political

party in power – is accepted in these days as an essential feature of modern gov-
ernment; Management Consultants can play an important role in assisting both
the government and industry to plan for the future.
It was not by chance this year that there was a marked increase in the work of
the member firms for government departments. Important assignments were
carried out for the Ministry of Defence, Ministry of Aviation, Board of Trade,
Department of Economic Affairs, War Office, National Economic Development
Council, Prices and Incomes Board, Ministry of Labour, British National
Export Council, Ministry of Public Buildings and Works, Department of
Scientific and Industrial Research, HM Stationery Office, GPO, Post Office
Savings Bank. In the nationalised industries, too, a number of important assign-
ments were carried out; these included work for the National Coal Board, sev-
eral of the Regional Electricity and Regional Gas Boards, the National Dock
Labour Board and British Rail. We regard this considerable expansion of work
for government departments and the nationalised industries as a significant fea-
ture of the year’s work.81
   Planning, 1960s–1970s  65

But if that was not a good enough year for an association which comprised
of only 11 British firms totalling 1321 UK-based consultants, the rise of
indicative planning had also extended interest in consultancy work to local
government and beyond82:

It is of significance, too, that increasing interest in the work of Management

Consultants is being shown throughout the country by Local Government
Authorities…the clients of the member firms of the MCA number no less than
218 Authorities to date… [in addition] regional economic development and
town planning have been areas in which several of the member firms of the
Association have been actively engaged. Examples include extensive investiga-
tions in the preparation of reports for the regional economic development of the
South-western counties of England and also in town planning and development
of the overspill areas in the North-West.83

The aggrandising terms used here are worth consideration. These were
“important assignments.” And the individualised listing of nearly 20 separate
bodies was surely for effect: consultants did lots of work for organisations
worth naming. Government work was attractive for consultants because it
raised their standing; there was a positive association to be gained from work-
ing for the state. This need for external support in enacting planning arrange-
ments arose because there was little internal knowledge or expertise on how to
successfully conduct planning at the time. As Donald MacDougall, a senior
economist at the DEA, recalls, “no-one [including himself ] seemed to be sure
exactly what [indicative planning] meant.”84 In addition, as George Cox
remembers, movement of individuals (and therefore ideas) between the pri-
vate and public sector was minimal in the early 1960s. Cox was therefore
unusual in that he could call upon his engineering experience with the British
Airways Corporation or systems design and manufacturing planning work
with Molins Machines when he conducted public sector consulting work for
the Royal Ordnance Factories. As such, British consultants could act as
“spreaders of knowledge,” harnessing their understanding of planning from
the private sector and putting it into practice in the state.85
One of the most high-profile of the early planning-based assignments was
a study by a consortium of MCA members for the National Economic
Development Office (NEDO) and Machine Tools Trades Association
(MTTA). The assignment, which was commissioned in June 1964 and cost
£10,000, split between NEDO and the MTTA, was for a survey “to widen
knowledge of the factors which determine decisions to invest in machine
tools.”86 The survey highlighted the extent to which the three interested
groups which NEDO represented (employers, government, and unions) were
66  A. E. Weiss

all broadly supportive of the use of management consultants in this period.87

Significantly for the MCA, George Brown, Secretary of State for the DEA,
decided to publish the report, feeling it was “important not only for the
Machine Tool manufacturers, but for all their customers, and the implications
for the understanding of tax allowance are so wide that I think we would lose
a great deal if we did not publish.”88 This was undoubtedly a boon for the
Association. Not only did the work of the MCA reach a wider audience than
expected, it did so with explicit government patronage. This was a tactic the
MCA had developed over several years. In 1963 a consortium of MCA mem-
bers conducted a report for the General Practitioners’ Association (GPA)
which recommended the GPA lobby for the pay structure they successfully
negotiated in the 1966 GP contract.89 The GPA were sufficiently content with
the report that it was officially published, thereby giving the MCA and the
GPA a joint publicity platform.90 Though the impact of these publications
cannot be conclusively ascertained, as Table A.1 shows, a considerable num-
ber of further studies were commissioned by the National Economic
Development Council from the Big Four firms.
In fact, a high degree of state-consultancy mutuality is apparent from much
of the work done on planning by the Big Four firms. In 1969 John Humble, a
director at Urwick, Orr & Partners, was paid by the Foreign Office to give a
three-week lecture tour in the United States on “Management by Objectives”
(MbO).91 Originally espoused by the Austrian-born management writer Peter
Drucker in his book The Practice of Management, Humble codified MbO into
a marketable product for Urwicks which provided organisations with a plan-
ning methodology which revolved around gaining consensus between employ-
ers and employees on an organisation’s objectives.92 Humble’s tour also
highlighted one of the main reasons why British management consultants were
used in this period—as a response to perceived economic decline. By sending
Humble to the United States the state was not only attempting to counter the
commonly held belief that the standard of management in Britain was poor, it
was suggesting that it could rival American management. As the rise of the
American consultancy firms shows, this was not a belief which lasted long.
Nevertheless, there appeared to be a high degree of government interest in the
concept of MbO, demonstrated by the fact that Urwicks were contracted for at
least 18 assignments in the period 1964–1979 to install “MbO” methodolo-
gies in departments or state bodies.93 (State work related to MbO represented
nearly a quarter of the total MbO-related support Urwicks undertook in this
period—highlighting that whilst state work was important, private sector work
still formed the majority of the company’s engagements.)94 Perhaps of even
greater lasting influence than this (though with probably some annoyance to
   Planning, 1960s–1970s  67

Urwicks) the Management Consultancy Group for the Fulton Committee on

the Civil Service (staffed with consultants from AIC, not Urwicks) also sought
to install MbO principles in every government department via planning units.95
Though the planning units did not immediately materialise, according to
Bernard Donoughue, they were the progenitor of Wilson’s 1974 Policy Unit
(which Donoughue headed), which in a revamped form remains to this day,
frequently staffed with former management consultants.96 Though this was
more due to accident than design, it does seem that the use of consultants by
the state quite simply begat greater use of their services.
To what extent did consultants successfully reinforce the concept of “plan-
ning” with state officials, to their own profit-seeking ends? This, after all, is a
critical consideration for understanding whether consultants were creators or
reactors to state market opportunities. Whilst consultants could bring to gov-
ernment the benefits of applying industrial techniques to state services, it
appears that at most consultants were just one set of actors contributing to the
debate on “planning.” Glen O’Hara’s work in this field has identified a multi-
tude of influences on political discourses on “planning”: Scandinavian mod-
els, French economic planning, and, earlier, Soviet-planning.97 As Jon Davis
has highlighted, at Macmillan’s Cabinet meeting of September 21, 1961, the
decision was made to undertake planning (which the Wilson governments
continued), and discussions were had on the importance of learning from
“both sides of industry [employers and trade unions], the commercial world
and elsewhere.”98 Undoubtedly, the presence of a successful British consulting
industry which had adopted and put into practice Taylorist planning tech-
niques contributed to the credibility of the concept. But there was not a sim-
ple, linear connection between consultants and state; consulting, dissemination
of international models of governance, policy legacies from the interwar
period, and an economic orthodoxy which favoured state intervention all
combined to contribute to the rise of planning.
It is here I wish to introduce a concept to aid our understanding of state-­
consultancy relationships: the “governmental sphere.” In this “governmental
sphere”—a particular development of the second half of the twentieth
century—a plurality of voices from diverse backgrounds joined together to
discuss means and methods of governing both the state and private enterprise.
The influence of external factors was strong—in this case the aftermath of the
Second World War, growing American influence, and perceived national
decline. Within this sphere, these factors were discussed, debated, internalised,
and remedies—such as planning—prescribed. Clearly consultants were part
of this sphere; but they were not the only agents engaged in it. It is a concept
we return to throughout this book.
68  A. E. Weiss

Distrust of the Civil Service

[In the Civil Service] working-class lads become undervalued professionals or
executive or clerical officers, while the nobs become administrators and acquire
the power.99 (Harold Wilson, Prime Minister)

Over the past two and a half decades, historians have rehabilitated the rep-
utation of Harold Wilson. Contemporaries had juxtaposed the national
embarrassment of sterling devaluation in 1967 with Wilson’s heady rhetoric
of modernisation at the start of the decade, and concluded—in the words of
Richard Crossman, a Cabinet Minister under Wilson—that the Prime
Minister had suffered the “most dramatic decline” in reputation of any pre-
mier, from which he never recovered.100 Since then, historians such as Richard
Coopey, Steven Fielding, John Young, and Nick Tiratsoo have sought to bring
back to centre-stage Wilson’s modernising zeal and decouple the implications
of the International Monetary Fund bailout from the intention and applica-
tion of Wilson’s policy.101 In 1992, Ben Pimlott, Wilson’s biographer, pro-
vided a sympathetic portrait of his study. More recently, O’Hara and Parr
have provided a sharper analytical focus on the Wilson governments’ motiva-
tions and intentions for change and sought to understand why the concept of
“modernisation” gained such significance in the period.102 Andrew Blick, in
particular, has studied Wilson’s attempts to reform the civil service, and high-
lighted Wilson’s motivation for achieving “social justice…economic growth…
and modernisation in its own right.”103 Most recently, a collection of essays on
Wilson edited by Andrew Crines and Kevin Hickson have continued the
rehabilitation, concluding: “Wilson and his governments deserve more praise
than has been customarily bestowed upon them.”104 As Wilson’s quote at the
start of this section suggests, here I propose an additional, and hitherto
underappreciated, point to be included in this revisionism of Wilson: the
extent to which Wilson had a deep suspicion of the civil service, and looked
to outsiders—including management consultants—to reform it.
As Gerald Kaufman—a Labour MP since 1970—noted when interviewed
in 2011, it is likely that much of Harold Wilson’s antipathy towards the civil
service stemmed from his own experiences as a proto-consultant working at
the Board of Trade in the Second World War.105 Wilson felt, with deep frus-
tration, that Whitehall was “excessively dominated by an upper middle-class
mandarinate” that had paid little heed to him during his time as an economic
specialist in the civil service.106 As Prime Minister, Wilson was spurred on by
his confidante and adviser, the Hungarian-born economist and staunch
Fabian Thomas Balogh, who in 1959 published a stinging attack on the per-
   Planning, 1960s–1970s  69

ceived amateurism of the generalist Oxbridge-educated mandarin, “The

Apotheosis of the Dilettante.”107 Those close to Wilson were highly conscious
of his problematic relationship with the civil service. As his political secretary,
Marcia Williams, wrote in her memoirs: “some of us who were very close to
him were worried it would be the civil servant who would dominate him.”108
Thus the Wilson governments, in what must be assumed to be at least in
part a reaction to the Prime Minister’s personal dislike of the administrators
in the civil service, heralded the emergence of numerous economic and special
advisers in government circles. Though this had occurred previously during
times of crises, their use in peacetime was a uniquely Wilsonian develop-
ment.109 This is well documented.110 Less well known, however, is that Wilson
explicitly endorsed the use of management consultants by government depart-
ments, telling the Secretary of State for Wales in 1967:

I have, as you know, paid much attention to the machinery of Government, and
I have not hesitated to make major changes when I thought they were needed…
The techniques used by management consultants in industry can certainly be
applied within Departments, and are increasingly being used.111

Wilson’s background at the Board of Trade may well have been instrumen-
tal in creating his positive attitude towards British management consultants.
Wilson took over from the pioneer of consultancy usage—Stafford Cripps—
as President of the Board just in time to enact a £150,000 five-year consul-
tancy grants scheme in 1947 and to oversee the formation of the British
Institute of Management (BIM).112 At the BIM Wilson would undoubtedly
have come into contact with Lyndall Urwick, who was one of the vice-­
chairmen of the BIM’s first council.113
Urwick, Balogh, and Wilson all disliked their time in the civil service and
diagnosed the same problem of the amateurism, elitism, and narrow-­
mindedness in the administrative class which sat at the apex of the service’s
hierarchy. This brings into question claims that the amateurism of the civil
service has been exaggerated; clearly if contemporaries believed there was a
problem, at the very least there was a perceived problem.114 As the cooling of
interest in management consultancy services in the 1950s suggests, whilst the
state may have been willing to use scientific and technical advisers in this
period, management advisers were less keenly favoured. Therefore whilst there
were factors larger than Wilson’s reforming agenda that facilitated the entry of
consultants into the state (hence consultants were used before Wilson),
Wilson’s desire to bring in external expertise clearly served as a catalyst for the
increased use of management consultants.
70  A. E. Weiss

However, Wilson’s most explicit endorsement of British management con-

sultants was indirect. In Labour’s election manifesto, Wilson declared that
“the machinery of government needs to be modernised” (a declaration which
largely seemed to rest on plans to spread the economic power of the Treasury
to other parts of Whitehall).115 Whilst the early years of his premiership
focused on the creation of new departments such as the DEA, Ministry of
Technology, and Ministry of Overseas Development, Wilson had not yet
turned attentions to the operations of actual civil servants.116 With encourage-
ment from the Chancellor of the Exchequer, Jim Callaghan,117 in February
1966, Wilson announced that the “Committee of Inquiry into the Civil
Service,” which would “examine the structure, recruitment and management,
including training, of the Home Civil Service, and to make recommenda-
tions,” would be chaired by Lord Fulton, Vice-Chancellor of the newly formed
Sussex University.118 Tellingly, Wilson had known Fulton from their time as
temporary civil servants in the Board of Trade.119 Under Fulton’s chairman-
ship were three dons, four high-ranking civil servants, two MPs, two leading
industrialists, and one trade unionist.120 One of these dons was the relatively
undistinguished Dr Norman Crowther Hunt, Fellow of Exeter College (the
wrong Norman Hunt was almost invited to sit on the Committee as Norman
Crowther Hunt was not in Who’s Who), who, according to Geoffrey Fry, “owed
his place on the Fulton Committee to the friendship that he had formed with
Harold Wilson at the time of the Whitehall and Beyond broadcasts.”121
Hunt was determined for an external management consultancy firm to
undertake an independent study of personnel management in the civil ser-
vice.122 No doubt aware of the high-profile failure of the modernisation efforts
of the Plowden Committee in the face of civil service obstructionism only a
few years earlier, Hunt was adamant that the study should not be undertaken
by civil servants.123 As Tony Benn recalled in his memoirs:

Norman Hunt came to see me this afternoon. He is on the Civil Service

Commission and had thought of suggesting to the Commission that they
should engage McKinsey’s (sic.) to do a job evaluation. In strictest confidential-
ity I lent him a copy of the McKinsey report on the Post Office [as Postmaster
General Benn had commissioned a report by McKinsey & Co. – see Table A.1]
and he took it away, promising to bring it back by hand.124

The Treasury, following the practice for hiring consultants set out in the
1965 report on “The Use of Management Consultants,” wrote to four firms
of consultants inviting them to tender for the work on July 13, 1966.125
Highlighting the difference between American and British consultancy firms
   Planning, 1960s–1970s  71

in this period, although McKinsey were Hunt’s preferred choice to undertake

the job evaluation study they ruled themselves out of the assignment.126
McKinsey refused to work in a team headed by Dr Hunt (though McKinsey
were also substantially more expensive). The American company wanted “a
McKinsey investigation producing a McKinsey report with full responsibility
for the results resting solely with the firm.”127 However, there may have been
a more parochial point at play: the Fulton Committee’s Assistant Secretary,
Michael Simons, noted concerns regarding the impression it would make hir-
ing an American firm, writing in an internal memo that “though [McKinsey]
were stimulating in some respects…we did not think that it would be very
right to employ an American consultant alone.”128 The three other invited
firms were members of the Big Four and had no concerns with working under
Hunt: Urwicks, who were ruled out on cost; PA Management Consultants,
who were ruled out as they charged on a time basis; and AIC, who were
accepted on the grounds they would charge a fixed price.129
The views of Hunt strike at the heart of the relationship between consul-
tancy and the state.130 The sociologist Weber, influentially, posited that one of
the benefits of the bureaucratic civil service was that its permanence made it
impartial in its advice.131 Yet Hunt’s insistence on an external consultancy
conducting the review rather than the civil service challenges this claim; at the
very least, the civil service was not perceived to be impartial, whereas external
consultants were. Since these perceptions were acted upon, surely this is what
ultimately matters for our understanding of the state. Admittedly, whether
the civil service possessed the competency to undertake such a review was
another consideration made when bringing in AIC, yet this was seemingly
not Hunt’s prime concern.
The subsequently formed Management Consultancy Group (MCG) con-
sisted formally of: Norman Hunt, E.K.  Ferguson from British Petroleum,
John Garrett of AIC (intriguingly, Garrett later became a Labour MP), and
S.D. Walker of Treasury Organisation and Methods Division; and informally
also Dr R. Ferguson, also of AIC.132 In total AIC were paid £14,332 10s for
their services.133 The MCG interviewed over 600 civil servants and produced
a report on the staffing structure of the civil service which was published as a
complementary volume alongside the official Fulton Report. According to
Lord Shackleton, then Minister without Portfolio in Wilson’s government,
the MCG report was “far and away a more important document [than the
main report].”134
The findings of the main Fulton Report were heavily influenced by the
MCG study and, though many of the 158 recommendations were never
realised, they made a significant impact on the way in which outside experts
72  A. E. Weiss

were viewed by the civil service, highlighting the two-way nature of the
consulting-­client relationship. The report called for a “central management
consultancy unit in the civil service” to be established—this became the Civil
Service Department (for which Shackleton became the minister) which acted
as the key conduit between government departments and consultancy firms.
It also recommended the establishment of planning units with accountable
management in government (a progenitor of Thatcher’s Financial Management
Initiative), and that there should be “greater mobility between the civil service
and other employments.”135 The latter recommendation led to a rise in sec-
ondments between consultancy firms and the civil service, and vice versa. As
covered in Chap. 3, this development may have been an important factor in
why there was such little hostility towards consultants from civil servants.
The Fulton Report itself sought, according to Hunt, to “carry out its own
investigation of what civil servants were actually doing” and understand the
field of “management theory” in the private sector, and how it could be applied
to the civil service.136 Such investigations were to be undertaken by management
consultants. At a meeting at Sunningdale on June 5, 1966, Ivor Young—himself
a management consultant seconded from Urwick, Orr and Partners—advised
the nascent Fulton Committee on how to procure consultants and who to
approach.137 From October 10, 1966, to April 6, 1967, the subsequent MCG
undertook “fieldwork” to fulfil Hunt’s desired investigation. Aiming to study
the work through a sample large enough to represent 10,000 civil servants, the
consultancy group studied 23 “blocks” of work including visits to (Table 2.4).
The 23 blocks were chosen by the two permanent secretaries who sat on the
Fulton Committee—Sir Philip Allen and Sir James Dunnett—based on
­suggestions from the Pay Research Unit, Staff Side of the National Whitley
Council, Treasury, and other permanent secretaries.138 There was a clear rec-
ognition by Hunt and the Fulton Committee of drawbacks to this approach,
but they defended it staunchly. In a letter, dated August 26, 1966, to the
permanent secretaries of the departments of the blocks under investigation,
Hunt wrote: “the result, as the Committee realise, will necessarily be impres-
sionistic, and there is obviously a risk here of drawing inferences from one
programme of work which would not have been chosen on equally valid
grounds. But the Committee’s eyes are open to this risk; they think that it is
still worth taking in order to get as good a feeling for the work on the ground
as they can within the time available, and I think this is right.”139
The MCG took as its terms of reference for investigation a note composed
by Hunt to:
   Planning, 1960s–1970s  73

Table 2.4  “Blocks” of work by Management Consultancy Group

Number
Ministry or of staff
department Fields of activity examined interviewed
Agriculture, Sugar, Tropical and Manufactured 21
Fisheries & Food Foodstuff Division
Defence (Naval) Civil Establishment Division
Organisation & Methods Division } 60

Stores Department 58
Education Architects & Buildings Branch 34
& Science Accountant General’s Branch
Automatic Data Processing Unit } 37
Health Establishment & Organisation Division 28
Housing & Local Planning Division A and related Planning 35
Government Services Section
Power Gas Division 14
Public Building Secretariat Division D (Navy Works) & related 18
& Works professional sections in the directorate
of General Works
Social Security Central Office, Newcastle 38

}
North Western Reg. (Pensions & Nat. Insurance)
North Western Reg. Office (Supplementary 25
Benefits)
Local Offices: Wigan (Pensions, Nat. Insurance 18
& Supplementary Benefits)
Technology Contracts Division 39
Royal Aircraft Establishment 37
Trade Companies Registration Office 26
Distribution of Industry Division 32

}
Transport Highways 4 Division (Special Roads A & B Divisions
& Motorway Engineering A & B Division) 41
Transport Planning Urban Division
Treasury Public Enterprises Division 15
Total 576

examine in detail a number of small blocks of work in the Civil Service. The
team would concentrate particular attention on the following:

a. The amount and kind of responsibility held by each officer within the block
b. The specialist content of the work and the way in which specialist skills are
brought to bear
c. The nature of the supporting services provided
d. The qualities and skills which the work calls for
e. The previous training which it calls for and how much those concerned have
had
74  A. E. Weiss

In part the operation would be a detailed consideration of Civil Service work

and practice matched against the knowledge possessed by members of the team
of the work and practice in efficient business firms.
The hope would be that such an investigation would throw light on:

a. What precisely are the actual tasks performed by the Administrative Class
b. The nature of the division between Administrative and Executive Class
functions
c. Whether there are the right number of grades in the hierarchy
d. The relationship between administrators and specialists
e. The extent to which an individual’s skills and abilities match the needs of his
job
f. Whether there is scope for the application of business methods of personnel
management
g. The extent of the burdens imposed by accountability to Parliament and how
that affects the nature of the jobs
h. Whether the pattern of responsibilities and expertise really is best designed to
secure the efficient achievement of the block’s objectives

As a by-product the survey could well through some light on:

a. New trends in Civil Service work

b. Problems of interchange between the Civil Service and business
c. Frustrations at all levels.140

At the risk of anachronism, what is stunning to note is the leading nature

of the questions posed by the Committee; this approach assumed “problems of
interchange” or whether “the pattern…really is best designed.” Contemporaries,
such as the Committee’s Assistant Secretary, Michael Simons, viewed Hunt as
seeing himself as “the leader of the team and its principal figure.”141 Another,
Richard Wilding, the Committee’s Secretary, noted on December 21, 1966,
that Hunt “has turned out to be so much the dominant figure in the team that
it is not practicable (as was originally intended by all concerned) for it to func-
tion in his absence.”142 This is important, because notionally consultants are
supposed to bring external insight and objectivity to a study: in this instance,
the work of AIC could plausibly be claimed to be confirming the biases of the
lead client, Dr Hunt. Indeed, in AIC’s proposal for the Fulton work the firm
made this explicitly clear, stating: “the objective of the consultants in each [of
the 23] block[s] would be to develop a model of the current work and practice
of the group of officers in that block, as to provide Dr Hunt with the necessary
information [to formulate recommendations].”143
   Planning, 1960s–1970s  75

The primary work of the MCG appears to have been to take the blocks of
work studied, and compare how private sector organisations or management
theory would advocate conducting such work.144 As E.K. Ferguson, one of the
group members, ventured in 1989: “what we recommended was the introduc-
tion into the civil service of attitudes of mind and practices that were com-
mon in private industry and commerce and the adoption of which we believed
would make for a more efficient civil service.”145 The MCG team were well
placed to take a view on such matters: Ferguson was on secondment from
British Petroleum; Garrett and R.F. Ferguson from AIC had worked across
industries in the private sector, and S.D. Walker, interestingly, had worked his
way up as a Clerical Officer at the Board of Customs and Excise in 1935 to
Chief Executive of the Treasury’s Organisations and Methods I Division.
Garrett also had transatlantic experience at as Visiting Fellow at the Graduate
Business School of the University of California in Los Angeles.146
This desire to emulate private sector best-practice also becomes apparent
from two of the major recommendations made by the MCG and incorpo-
rated into the Fulton Report: abolition of the class structure and the develop-
ment of “accountable management” in the civil service. With regard to the
first, intriguingly, British Petroleum was chosen as a specific case study, despite
the fact the oil company was 49 per cent state-owned at the time. The main
reason for this may have been Hunt’s desire to abolish the class system and
instead implement a unified grading structure in the civil service. Tellingly,
British Petroleum also operated on such a structure.147 With regard to account-
able management, as E.K. Ferguson recalled, “the MCG meant accountable
management not in terms of heads rolling but in terms of personal responsi-
bility for an area of work. Somebody carries the can when things go wrong.”148
Such a concept had become popular in management theory since Peter
Drucker’s book The Practice of Management in the 1950s, and for the commit-
tee member Robert Sheldon “it was inherent in appointing the MCG that it
would advocate accountable management.”149 In addition, an extensive review
of other bureaucracies was also undertaken, with France, the United States,
Holland, Sweden, West Germany, and Canada also analysed.150 Testimonies
were invited: Richard Crossman, then Leader of the House of Commons,
witheringly ventured that his experience in government had reinforced—not
diminished—his support for Balogh’s “Apotheosis of the Dilettante.”151
Wilson, for reasons of considerable speculation amongst his colleagues, had
a deep passion for the findings of Fulton and their subsequent implementa-
tion. As Richard Crossman wrote in his diary: “I’m pretty sure that the reason
he has committed himself to this report so early and so personally is partly
because he has a strong liking for Fulton and Norman Hunt and partly
76  A. E. Weiss

because he thinks this way he can improve his image as a great moderniser.”152
Wilson’s commitment to Fulton, and in particular his desire to remove from
the civil service what he believed were its worst traits of the stuffy “nobs and
administrators” (as he described them), is clear in the papers. Michael Halls,
his Principal Private Secretary, wrote to Wilson, summarising the penultimate
draft of the report in 1968:

The Fulton Report is…seeking to establish a Service with opportunities for all
(eliminating the defects of what is in fact, at present, “class snobbery”) and a
new found professionalism…my own personal view is that it is just the kind of
radical reform that is essential.

Next to “my own personal view,” Wilson scribbled enthusiastically: “And

mine.”153
Wilson was determined to push through as early as possible two of the
main recommendations of Fulton: the abolition of the tripartite class system
of personnel structure and the creation of the CSD, which would take control
of management improvement in the civil service out of the Treasury—where
it used to be part of the Management Services Division—and into a new
department. (Ironically, though Wilson had a deep distrust of the Treasury,
through its constant search for economies it favoured his view regarding the
use of management consultants. In 1965 Sir Laurence Helsby, as Head of the
Home Civil Service, told his colleagues: “in our efforts to achieve the highest
efficiency in Departments, we cannot afford to neglect any worthwhile source
of expert help…I think that the [Treasury] working party is right in conclud-
ing that there may be greater scope for using management consultants.”154)
Wilson was thwarted in his attempts to abolish the class system, but suc-
ceeded in the creation of the CSD.155
William Armstrong, Head of the Home Civil Service, speaking a few
months after the anniversary of the CSD’s creation, described its purpose as
twofold:

First, to “manage” the Civil Service i.e., to keep it running as a going concern.
Second, to carry out a programme of reforming the Civil Service, with the
object of improving its efficiency, and its humanity. The Fulton Report…has
demanded…a root and branch examination of the tasks of the Civil Service and
the way it is staffed and organised.156

The new focus on efficiency and staffing were well evidenced within the year.
The staffing of the CSD demonstrably made an effort to move away from the
civil service “philosophy of the amateur,” as the Fulton Report described it;
   Planning, 1960s–1970s  77

Armstrong cited “25 scientists, 13 engineers, 3 economists, 6 accountants and

auditors; 23 people from outside the Civil Service, including 8 from universi-
ties and 10 from private industry, including 5 from management consultants”
worked in the CSD.157 And the CSD took little time in hiring consultants;
within the first year AIC Limited were procured for “a study of the pay struc-
ture at the highest levels of the Civil Service” and PA Management Consultants
undertook a “review of catering services” across government.158
Therefore the Fulton Report had a great bearing on the future of manage-
ment consultancy and the state. Not only did this create a stand-alone govern-
ment department tasked, amongst other responsibilities, with promoting the
use of consultancy firms in the civil service, through his explicit endorsement
of Fulton and the work of the MCG, Wilson immeasurably furthered the
standing of management consultancy firms within the British state.159
Whilst the Heath government of 1970–1974 did not explicitly endorse
management consultancy firms to the same extent as Labour had, Heath too
had suspicions about the competence of Whitehall mandarins. Heath had
long-held plans for reforming the civil service which were influenced by
American consultancy firms.160 These were articulated in the 1970 White
Paper The Reorganisation of Central Government. As made clear in the
Conservative’s 1970 election manifesto: “Some present government activities
could be better organised using competent managers recruited from industry
and commerce.”161 By noting the benefits that could be achieved from private
sector agents being brought into the machinery of the state, they demon-
strated similar attitudes to external expertise as their Labour counterparts. As
demonstrated in the next chapter, most of the major state-consulting assign-
ments in the early 1970s were undertaken by American consultants and were
related to state bodies outside of the central government departments.
Nevertheless, in the heart of the state Heath created the Public Sector Research
Unit (PSRU), Businessmen’s Team and Central Policy Review Staff; the latter
in a bid to fill “the hole in the centre” (as Lord Hunt, Cabinet Secretary
1973–1979, described it).162 It seems that this was largely motivated by a
distrust—similar to Wilson—of the civil service in general, and Treasury in
particular.163 The units set up by Heath were overwhelmingly influenced by
American business ideas and discussions with consultancies.164 The PSRU was
also inspired by Ermest Marples, a former business and Conservative MP, who
in 1969 wrote of his “hatred of bureaucracy…and the modern assumption…
that the solution to every problem must be a government solution.” Heath
had commissioned Marples to research the machinery of government, and his
proposed solution, the PSRU, was to create a unit with “analytical capability”
to advise on government planning (and provide an alternative source of exper-
tise to the Treasury).165 Operating whilst in opposition, the PSRU hired RTZ
78  A. E. Weiss

Consultants for a study on government decision-making and Arthur D. Little

for work on public procurement.166 Once in government the PSRU provoked
discussions which led to the establishment of the Central Policy of Review
Staff in 1971, led by Victor Rothschild, to promote long-term planning in
government. And in 1970, a Businessmen’s Team (see Chap. 3) was run by
Richard Meyjes, a prominent figure from industry.167
Heath’s organisational changes are significant for three reasons. First, they
highlight a political consensus across both Labour and Conservatives of mis-
trust of the civil service, yet confidence in the advice of outsiders. Second,
though government departments continued to use British consulting firms in
this period (see Table A.1), Heath’s main focus was on American consultan-
cies; elite interest in management reform had begun to look away from British
firms. And third, the units were largely staffed with outsiders, secondments
from consultancies, or former consultants, and consultancies themselves, fur-
ther highlighting the extent to which a plurality of agents were involved in
discussions around governing in this period.
Here, a political prism is helpful to differentiate between Wilson and
Heath. Both had a genuine interest in modernisation. But their motivations
were acutely different. Wilson believed a technocratic breakthrough could
move the state away from the amateurism he had experienced both at the
Board of Trade as a proto-consultant and as a Minister. Heath, on the other
hand, believed that a more business-like approach to the governance of the
state would help to address economic growth. That the means Wilson and
Heath chose to achieve their desired ends—both were influenced by, and sup-
ported the use of, management consultants—were similar tell us much about
the chameleon-like role consultants played in the postwar British policy-­
making process. But it is important to note that their motivations and ends
were quite distinct.

The Management Consultant’s Lament

We showed them how to maximise the Branch’s optimality,
How micro-economics had become a stern reality;
They listened with politeness but preferred their old autonomy,
Their faulty input-budgeting and massive diseconomy.
Evaluative charting could not penetrate their fallacies;
They could not see the logic of cost-benefit analysis;
Their data-handling system was in urgent need of focussing;
They had not learned the rudiments of information-processing.
   Planning, 1960s–1970s  79

Their output was unprogrammed, their retrieval was minimal;

Their information-network was so crude as to be criminal;
We gave the multi-access on a scheme multi-dimensional:
Their coldness was so cutting that it might have been intentional.
Our trees and algorithms were rejected with acidity;
It really is heartbreaking to encounter such stupidity.
If cybernetic doctrine cannot change their methodology,
Can’t they at least be men enough to learn the terminology? (J.M. Ross, Home
Office, February 1968168)

How did civil servants view this British generation of consultants, and vice
versa? J.M. Ross’ above poem describing the trials and tribulations of a man-
agement consultant working in the public sector in the late 1960s helps to
deepen our understanding of civil service-consulting relationships. Ross’ poem
suggests a more nuanced picture than one of outright hostility. With reference
to the “Branch’s optimality,” it is most likely Ross worked on PA Management
Consultants’ “review of the structure and organisation of the Metropolitan
Police” from 1965 to 1967.169 There is much in Ross’ writing to give credence
to the closed civil service thesis: lamentations of how “they listened with polite-
ness but preferred their old autonomy” [they are presumably the disinterested
civil service], for instance. Around the same period, responses in the Ministry
of Agriculture and Fisheries towards the Treasury’s suggested use of consultants
were similarly cool; C.H.A. Duke’s comments at the start of the chapter attest
to this. Yet there is a twist to the story: Ross was in fact a civil servant.
Since the mid-1960s, it had become commonplace for civil servants to
work jointly on consulting projects. The Treasury explicitly endorsed this
approach in its 1965 directive, stating: “wherever possible, it should be part of
the arrangements for engaging a consultant that an officer or officers of the
Department capable of benefitting technically from experience of the consul-
tant’s methods should work with the consultant.”170 It is most likely therefore
that Ross—a career civil servant in the Home Office (later gaining an OBE
for his work as head of the Nationality Division)—was part of these “arrange-
ments.”171 Ross’ language is all the more fascinating as a result, because when
he writes, “we showed them,” the “we” is a civil service-consulting partner-
ship, and “they” are the civil service. The poem betrays emotions of deep
mutuality in this partnership; the civil service “had not learnt” what he and
PA Management Consultants knew—its stupidity was “heartbreaking.”
The language of Ross is striking for its technocratic terms: “micro-­
economics,” “input-budgeting,” “a scheme multi-dimensional,” “cybernetic
doctrine.” Whilst the possibility that Ross is being entirely ironic should not
80  A. E. Weiss

be discounted, it is highly plausible that this was a language familiar to him,

and represented the emergence of a “new technical middle class” in Britain,
with professional expertise in engineering or science. As Edgerton has pointed
out, this was a new class, one which the social historian Harry Hopkins
described in the 1960s as “men in grey pullovers and grey raincoats…their
alma mater more likely to be redbrick than Oxbridge…shamelessly talking in
highly miscellaneous accents their unintelligible shop.”172 The recruits of PA
consultants and the British consultancies more generally fitted this profile, as
they sought—in the words of Ernest Butten, founder of PA—men who were
“young – say 28; very ambitious, frustrated by slow progress in industry; of
high but not brilliant intelligence; from a grammar school; and climbing
socially from a modest home.”173 George Cox, who worked for Urwick, Orr &
Partners on a review of the Royal Ordnance Factories in the early 1970s,
matched this profile: educated at Quintin School before studying engineering
at Queen Mary College, University of London, and then working for British
Airways Corporation and then Molins Manufacturing before moving into
consulting to “go up the manufacturing ladder faster.”174 The mutuality
between this non-elite level of civil servants and consultants is well evidenced.
M.R.  Gershon, who worked in Treasury Organisation and Methods in the
mid-1960s, noted “similarity of method and similarity of purpose,” and Cox
recalled of relationships: “On a personal level it was all very good. At the Royal
Ordnance Factories we got on very well with the mid-level civil servants we
worked with.”175
This mutuality underscores an important point regarding the changing
nature of both the civil service and British society in this period. Figure 2.2
highlights the rise of this class, and Fig. 2.3 chronicles the growth in its com-
plementary category: managers—the ultimate contacts of consultants. In fact,
in 1971, Britain’s top rank of civil servants had the highest proportion of sci-
ence, engineering, and mathematics graduates (26 per cent) from a study of
Britain, Germany (14 per cent), and Italy (10 per cent): in sharing the back-
ground and education of many consultants there was clearly receptive ground
for many of the ideas and methodologies of such outsiders.176
Of course, it would be dangerous to generalise that state-consulting rela-
tionships were uniformly positive, or that civil servants and British consultants
shared exactly the same backgrounds. With regard to the middle rank of civil
servants, the executive class, as the publication O&M (Organisation & Methods)
Bulletin noted in May 1966, “recruits to management consultancy…are almost
always university graduates or holders of roughly equivalent professional
qualification. Normally there is no similar qualification expected of Civil Service
O and M [the in-house consultancy in the Treasury] though some have them.”177
   Planning, 1960s–1970s  81

Constituents of Class 1A (Higher professionals), 1911-1951 (000s)

160

140

120

100

80

60

40

20

0
Engineering Science (2) Church Medicine Law Writing (3) Armed Accounting
(1) forces (4)
1911 1921 1931 1951

Fig. 2.2  The growth of the technical class. (Data from Guy Routh, Occupation and Pay
in Great Britain 1906–60 (Cambridge: Cambridge University Press, 1965), 15. Notes on
data: (1) includes surveyors, architects and ship-designers; (2) includes statisticians and
economists; (3) includes editors and journalists; (4) commissioned officers)

Managers and senior administrators, 1911-2001 (000s)

5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
1911 1931 1951 1971 1981 1991 2001

Fig. 2.3  The rise of managers in Britain. (Data from J. F. Wilson and A. W. J. Thomson,
The Making of Modern Management (Oxford: Oxford University Press, 2006), 18)

And of the qualifications which consultants held, a number of them were from
Oxbridge: R.D.S.  Swann, who at the age of 44 was appointed from PA
Management Consultants by the Home Office in 1965 to “reshape [the] gaol
industries,” was educated at Marlborough and then Cambridge. But Swann read
82  A. E. Weiss

mechanical sciences, a far cry from the arts and humanities graduates in the civil
service which Balogh derided.178
Regardless, it appears that there was a high degree of positive working
between sections of the civil service and consultants and, even if it was not
immediately forthcoming, trust could be gained. For example, Vic Forrington,
a consultant at the time, recalled that for Urwicks’ support for the Royal
Ordnance Factories (which had as its terms of reference “to recommend a
computer strategy for the total organisation, involving sites throughout the
UK embracing the manufacture of explosives, ammunition, small arms, fuses,
field guns and military vehicles including the Chieftain tank”) the advice of
the consultants (who also had civil servants seconded into their team from the
Home Office) alone was not enough to convince the main client, the Secretary
of the Royal Ordnance Factories.179 In Forrington’s recollection:

Our recommendations were largely accepted, although we had to demonstrate

through introductions to private sector companies, including Smiths Industries
and Plessey that they did not involve any too radical or controversial thinking
which could possibly rebound on the reputations and careers of those able pub-
lic servants who had commissioned our work.

This supports the view of another consultant who was present at the time—
George Cox—that Urwicks’ role (and the role of consultants more generally)
was to act as “spreaders of knowledge” from private to public sectors.180 But
this view, if we are to assume Forrington’s recollection is correct, also raises
three further issues to consider.181 First, that civil servants, even if initially
sceptical, could be convinced by consultants, provided that appropriate evi-
dence was demonstrated, to support recommendations. Second, that the pub-
lic sector in this period was clearly receptive to ideas from outside, and
especially from the private sector. And third, to demonstrate the validity of
the recommendations, the consultants had to make connections with private
sector companies—thereby highlighting the importance of both networks of
individuals and ideas around public and private sector governance, as well as
the extent to which consultants helped broker these networks.

Reviving British Industry

I would stick my neck out and say that this country’s existing labour force could
produce thirty per cent more without spending money on capital investment.182
(G. Wood, management consultant at Urwick, Orr & Partners, Evidence to Royal
Commission on Trade Unions and Employers’ Association, December 6, 1966)
   Planning, 1960s–1970s  83

Throughout the 1960s and 1970s successive governments wondered how

to revive British industry in the face of heightened international competition.
As G. Wood’s comment shows, consultants were well aware of this. Since its
inception, the Ministry of Technology had sought how to encourage British
companies to use management consultants. By 1966 several organisations
existed to facilitate this: the British Productivity Council; British Institute of
Management (which kept a register of all consultancy firms); Industrial
Society; and the Ministry of Technology’s own consultancy unit, the
Production Engineering Advisory Service.183 In 1969 the Board of Trade even
proposed a £15 million national five-year grants scheme encouraging small
firms to use consultants, extending its successful £500,000 pilot scheme in
Glasgow and Bristol which had seen over 200 companies use (overwhelm-
ingly British) consultancy firms.184
Clearly, the Wilson governments of 1964–1970 believed that state inter-
vention was needed to fix the problems of industry. In a memo to the Secretary
of State for Scotland, Wilson expressed his concerns regarding the un-­
governability of the expanding nationalised industries: “The nationalised
industries represent such a large sector of the economy that a comprehensive
audit of their efficiency cannot be done by a single unit of the type that was
established in the National Board for Prices and Incomes.”185 It is with these
concerns in mind that the Labour government’s support of British consul-
tancy firms must be viewed. As the Paymaster General Judith Hart told the
House of Commons in 1968:

Management consultancy in this country has made striking progress in recent

years; and rightly so. Skilled work of this kind makes a valuable contribution to
the achievement of greater management effectiveness and industrial efficiency,
and therefore to the higher productivity which is essential to us as a competitive
industrial nation.186

Thus the 1969 proposed consultancy grants scheme sought “to bring about
an improvement in the efficiency of individual firms, thus benefiting the
economy,” and represented an attempt to plug the “serious gap in our effort
to improve the competitiveness of British industry.”187 Though Wilson was
known to favour the scheme, the pressing economic situation meant the
Treasury refused to provide the funds until after the forthcoming general
election.188
The Conservatives seemed to share Labour’s concerns with industrial effi-
ciency (and specifically, industrial management), promising in their 1970
election manifesto that: “We will encourage wider and better provision for
84  A. E. Weiss

management training [as] good management is essential not only for effi-
ciency and the proper use of capital resources, but also for the creation of
good industrial relations.”189 However despite Heath’s modernising zeal, his
government did not seem to view British consultants as being the answer to
the problem of productivity and industrial efficiency. As detailed in Chap. 3,
Heath seemed more interested in the offerings of American consultancy firms
and the advice of business experts than the work of the traditional British
consultancy firms. It is quite likely that this was because though “planning”
began under the Conservatives, it was Labour who were more committed to
its principles. Thus the proposed Board of Trade consultancy grants scheme
was dropped, and no direct government support was made by the Conservative
administration to encourage the use of consultants by industry.
On returning to power, Labour continued its interest in external consul-
tants as a solution to Britain’s industrial problems. Tables A.1 and A.2 detail
many of these; one can ascertain from the tables that the majority of
studies were undertaken by British consultants. In 1975 a Labour Research
Department memorandum considered the “need to improve the perfor-
mance of British industry [via] a State Management Consultancy Service.”190
Three years later, the 1978 White Paper on Nationalised Industries stressed:
“The government expects that, in the normal exercise of their management
functions, the industries will continue to take the initiative in calling man-
agement consultants to undertake special studies when necessary.”191 However
despite the rhetoric which suggested consultants were central to the revitali-
sation of British industry, political practicalities highlighted the fact that the
advice of consultants was just that—advice, which could be disregarded as
the government saw fit. In 1978, one of Tony Benn’s struggling co-operative
ventures—Kirby Manufacturing and Engineering Company (KME) in
Merseyside—called in PA Management Consultants to help make the case
for further government assistance. PA advised Alan Williams, Minister of
State for the Department of Industry, that KME could break even within the
year and return to profitability in two, though this would require a further
£2.9 million of government assistance (KME had previously received £5.4
million).192 But despite PA’s report, the government, which had adopted a
tighter monetary policy since Callaghan’s 1976 Labour Party Conference
speech in Blackpool, would no longer consider further industrial bailouts.193
KME was allowed to go under in a Cabinet meeting which Benn recalled as
being a “most unpleasant discussion.”194
   Planning, 1960s–1970s  85

The Decline of the Big Four

Most work was shop floor stuff; solving problems and improving operational
efficiency. By the time I left there was a certain amount of strategic board level
work, but the Americans had come in and grabbed most of that.195 (Antony
Graham, Production Engineering Ltd., 1960–1972)

In the 1960s and 1970s, management consultancy firms of British origin

seemed to answer some of the main challenges of the era: introducing plan-
ning into state bodies, reforming an amateurish civil service, and revitalising
British industry. But by the end of the 1970s, the great experiment in state
sponsorship of these British firms seemed to have failed from both sides. As
Antony Graham’s quote indicates, by 1979, this generation of British consul-
tancies had suffered substantially from the emergence of new generations of
consultancy competitors from very different origins—American consultancy
firms and the consulting divisions of accountancy firms. Not only was Britain
in the throes of a long run of deindustrialisation, the original Big Four firms
had changed beyond all recognition. From 1967 to 1974, the proportion of
AIC’s revenues which came from “production” work decreased from 46 per
cent to just 22 per cent; Urwicks’ dropped from 35 per cent to just 14 per
cent; and the story was similar for the other two British firms.196 Increasingly
the Big Four sought to abandon their heritage of working on issues of indus-
trial productivity and tried to emulate their competitors. Where the Big Four
had been at the vanguard of a blossoming British consultancy industry in
1964, by 1979 they were languishing behind two very different types of con-
sultancy firms: the American strategists who took some of the most high-­
profile state assignments in the 1970s and offered high-level organisational
advice; and the accountancy firms, which by the late 1970s were receiving
lucrative fees for work concerned with management information systems and
computer technologies. The British firms were looking increasingly irrelevant
and marginalised. Only PA Consulting survived the recession of the 1970s
with buoyant finances, but it now resembled a completely different firm:
internationalist in outlook—having left the MCA in 1975—and focused on
computer technologies.
As Table 2.2 shows, although the majority of MCA revenues were ascribed
to the Big Four in this period, the decline of the British consulting firms was
marked and rapid. It also represents a truly forgotten path not taken in the
history of the British state. This neglected history is deeply intertwined with
the rise of American influence on the West, and panics around British decline.
As a result, American consultancies in particular began to be used to a far
86  A. E. Weiss

greater extent than before the late 1960s by the state. As explored in the next
chapter, American consultants were particularly effective in infiltrating and
emulating the British elite and succeeded in winning assignments with over-
whelmingly “British” institutions, such as the NHS.

Notes
1. O&M Bulletin 21, no. 4 (1966): 173–184.
2. TNA: MAF 331/45, “Use of Management Consultants by Government
Departments.” Memo from W.G. Boss, October 25, 1965.
3. TNA: MAF 331/45. Memo from C.H.A. Duke, November 29, 1965.
4. Brech, Thomson, and Wilson, Lyndall Urwick, 213.
5. Niccolò Machiavelli, Bernard Crick, and Leslie J.  Walker, The Discourses
(Harmondsworth: Penguin, 2003), 501.
6. Cited in McKenna, World’s Newest Profession, 11.
7. Francis Bacon, Essays, Civil and Moral (New York: P.F. Collier & Son, 1909),
XX, Of Counsel.
8. McKenna, World’s Newest Profession, 11.
9. Derek Matthews, Malcolm Anderson, and J. R. Edwards, The Priesthood of
Industry: The Rise of the Professional Accountant in Business Management
(Oxford: Oxford University Press, 1998), 121.
10. For this data, see ukpublicspending.co.uk, Last accessed: August 27, 2015,
http://www.ukpublicspending.co.uk/
11. For a more general discussion on this see: Chris Otter, The Victorian Eye: A
Political History of Light and Vision in Britain, 1800–1910 (Chicago, Ill.;
London: University of Chicago Press, 2008), 12–14.
12. See Jose Harris, William Beveridge: A Biography (Oxford: Clarendon Press,
1977), 136–40; Peter Hennessy, Whitehall, Rev. ed. (London: Pimlico,
2001), 53–56; for more on the use of experts for the rationalisation schemes
in the interwar years see J.H. Bamberg, “The Rationalization of the British
Cotton Industry in the Interwar Years”, Textile History 19, no. 1 (1988):
83–102 and J.I.  Greaves, “‘Visible Hands’ and the Rationalization of the
British Cotton Industry, 1925–1932”, Textile History 31, no.1 (2000): 102–
122. Intriguingly, in the interwar cotton rationalization schemes the govern-
ment placed responsibility for the programme under the Bank of England.
Facing increasing competition from Japanese and Indian trade, under
Governor Norman Montagu the Bank put pressure on cotton factories to
form horizontal mergers—the most famous being the creation of the
Lancashire Cotton Corporation in 1929. Management consultants do not
appear to have been used extensively in these interwar schemes, which have
been the subject of considerable retrospective criticism.
   Planning, 1960s–1970s  87

13. Keith Grieves, Sir Eric Geddes: Business and Government in War and Peace
(Manchester: Manchester University Press, 1989), ix–xi.
14. See Table A1.
15. Weatherburn, “Scientific Management”.
16. Ferguson, The Rise of Management Consulting, 26–27.
17. Nicholas J.  Griffin, “Scientific Management in the Direction of Britain’s
Military Labour Establishment During World War I,” Military Affairs 42
no. 4 (1978): 197–198.
18. Frederick Winslow Taylor, The Principles of Scientific Management (New
York: Harper, 1911).
19. See Kevin Whitston, “The Reception of Scientific Management by British
Engineers, 1890–1914” The Business History Review 71, no. 2 (Summer,
1997): 207–229.
20. Charles S.  Maier, “Between Taylorism and Technocracy,” Journal of
Contemporary History 5, no. 2 (1970): 27.
21. See Mauro F.  Guillén, Models of Management: Work, Authority and
Organization in a Comparative Perspective (University of Chicago Press,
1994), 264.
22. Ferguson, The Rise of Management Consulting, 41.
23. Ibid., 254; see Principles of Scientific Management.
24. Ferguson, The Rise of Management Consulting, 14.
25. Ibid., 75.
26. Tisdall, Agents of Change, 23.
27. Kipping, “American Management Consulting Companies in Western
Europe,” The Business History Review 73, no. 2 (1999): 198.
28. Tisdall, Agents of Change, 25.
29. Ferguson, The Rise of Management Consulting, 44–54.
30. For British resistance to Taylorism, see Aaron Lawrence Levine, Industrial
Retardation in Britain, 1880–1914 (London: Weidenfeld & Nicolson,
1967), 60–61; Laura Lee Downs, “Industrial Decline, Rationalisation and
Equal Pay: The Bedaux Strike at Rover Automobile Company,” Social
History 15, no. 1 (1990): 45–73; the rejection of the Bedaux system at Rover
Co. in 1930 is described in Wayne Lewchuk, “Fordism and British Motor
Car Employers, 1896–1932,” in Howard F. Gospel and Craig R. Littler eds.,
Managerial Strategies and Industrial Relations (London: Heinemann, 1983),
82–110; the adoption of the “B unit” system in Britain is described in
Kipping, “American Management Consulting Companies,” 198.
31. Number of plants taken from Peter Scott, Triumph of the South: A Regional
Economic History of Early Twentieth Century Britain (Aldershot: Ashgate,
2007), 105.
32. Tisdall, Agents of Change, 9.
33. Ibid., 26.
88  A. E. Weiss

34. Ibid., 9; the BIM register is available at the Warwick Modern Records
Centre, “British Institute of Management,” MSS. 200/F/T3/25/6.
35. See, for instance, “Deployment of Cotton Workers,” The Times, April 1,
1948, 2.
36. For more on this debate, see Jim Tomlinson, “Understanding Mr. Attlee: the
Economic Policies of the Labour Government, 1945–51,” ReFresh 27
(1998): 1–4; Another fascinating case study on this is the work of Ian
Mikardo, a Labour MP who in this period forwarded the concept of “radical
productionism”—which sought to increase unions’ understanding of man-
agement in order to improve productive efficiency. For more on this see
Nick Tiratsoo and Jim Tomlinson, Industrial Efficiency and State Intervention:
Labour 1939–51 (London: LSE/Routledge, 1993), 124–25.
37. See, for instance, Jim Tomlinson “Conservative Modernisation: Too little,
too late?”, Contemporary British History 11, no. 3 (1997): 18–38.
38. See TNA: CO 1022/314–316. “Reports on the reorganisation of
Government administration in Singapore by Urwick, Orr & Partners”.
39. TNA: AN174/1196. “Training programme in collaboration with Messrs.
Urwick, Orr & Partners Limited and North Eastern Region.” Urwicks’ work
demonstrates how consulting assignments were won in this period. In 1960,
Urwicks undertook a free piece of consultancy work “to review the present
training methods and to study personnel arrangements relating to traffic
grades at station level” for the North Eastern Region of British Railways.
The General Manager of the region, H.A. Short, thought the report “of a
high order and ‘pulls no punches’” and forwarded it, with “pleasure” to
A.R. Dunbar, Manpower Adviser at the British Transport Commission. On
the basis of Short’s encouragement, Dunbar proceeded to hire Urwicks—
this time for a fee—to improve the training quality and morale of staff across
the North Eastern Region. See H.A. Short memo to A.R. Dunbar, “My dear
Dunbar…” February 23, 1960.
40. TNA: MH/427. Walker-Smith memo to Cunliffe, 13 May 1960.
41. Ibid. Cunliffe to Walker-Smith, 19 May 1960.
42. See TNA: MH/427; TNA: MH/428.
43. Calculated by author from company annual returns in MCA: box 22.
44. An abridged version of the report is available in O&M Bulletin 21, no. 4
(HM Treasury, 1966), 173–184.
45. House of Commons debate, Government Departments (Organisation and
Structure), May 17, 1962, vol 659 cc1512–1522.
46. “Charles Bedaux Dead: Suicide While in Custody,” The Times, February 20,
1944. An American citizen, Bedaux was arrested on suspicion of assisting
Nazi and Vichy officials; amongst various suspected offences, he was accused
of passing sensitive American information to the Nazi regime from the files
of the Bedaux Company in Amsterdam. He died from a large overdose of
sleeping tablets.
   Planning, 1960s–1970s  89

47. Based on data derived by the author from MCA archives. Figures for 1967
are based on company returns for annual revenues, MCA: box 23. Figures
for 1974 are based on company returns found in MCA: box 22.
48. Data derived by the author from MCA archives. Member firms were asked
to give annual returns on their consultancy assignments, broken down by
the Board of Trade’s Standard Industrial Classification system. Here, the
classification “Public administration and defence” is used as a proxy for state
bodies. MCA: box 23.
49. Middleton, The British Economy since 1945: Engaging with the Debate, 88.
50. MCA Annual Report, 1962.
51. “Management Consultants Association,” Financial Times, March 23,
1962, 4; “Management Consultants Association: Contribution to Higher
Productivity,” The Times, March 22, 1962, 20.
52. MCA Annual Report, 1962.
53. See Kipping, “American Management Consulting Companies”, 201–202.
54. Although political and commercial expediency also played a part here.
Charles Bedaux was effectively persona non grata by the late 1930s in
Britain, as described in footnote 223. Further details are in Tisdall, Agents
of Change, 8; and The Times, February 20, 1944.
55. TNA: LAB 28/16/15, “Royal Commission on Trade Unions and Employers’
Association”, December 6, 1966.
56. House of Commons debate, Public Bodies (United States Management
Consultants), November 27, 1968, vol 774 cc 682–692; Eric Lubbock,
Baron Avebury, correspondence with author between February 15 and
February 27, 2011. See Appendix 1 for biography.
57. Derived by author from company returns. MCA: box 23.
58. Peter Mandler, The English National Character (London: Yale University
Press, 2006), 215.
59. Ibid., 214.
60. Alan Booth, The management of technical change: automation in the UK and
USA since 1950 (Basingstoke: Palgrave Macmillan, 2007). Of course, even
more has been written on how American culture was transported in this
period. For Hollywood, jazz and finance, see Phillip Blom, Fracture: Life &
Culture in the West, 1918–1938 (New York: Basic Books, 2015).
61. See, for instance, Victoria De Grazia, Irresistible Empire (Cambridge, Mass.:
Belknap, 2005).
62. MCA Annual Report, 1962.
63. “Army Idea Urged in Personnel Work; Continuous Training advised by
Major Urwick,” New York Times, October 6, 1938.
64. “Gain Seen in Japan for U.S. Food Sales,” New York Times, March 30, 1964.
65. According to Patricia Tisdall in 1982, “consultants trace a dislike of full-­
blooded advertising to the reaction of the institute of Chartered Accounts
(ICA) against the sales tactics used by George S. May, in 1961” which led to
90  A. E. Weiss

a High Court tribunal case against an employee of the firm “for acts or
defaults discreditable to a member of the ICA…[through] offering services
by advertising.” Agents of Change, 1, 64–65.
66. MCA Annual Report, 1985.
67. House of Commons (HoC) debate, Organisation and Methods Staff, June
29, 1962, vol 661 cc929.
68. HoC debate, Debate on the Fourth Address, November 6, 1964, vol 701
cc555.
69. HoC debate, Labour Relations (Negotiating Machinery), February 18, 1966,
vol 724 cc321–322.
70. From author analysis of Hansard coverage.
71. HoC debate, Budget Resolutions and Economic Situation, March 17, 1969,
vol 781 cc1372.
72. “Mr Ennals scorns idea of “taxing sick” to save NHS,” The Times, January
25, 1977.
73. Hamish Donaldson, correspondence with author between March 3, 2011
and April 4, 2011. See Appendix 1 for biography.
74. MCA Annual Report, 1965.
75. O’Hara, From Dreams to Disillusionment, 1. This is not to say that “plan-
ning” was not influential in earlier decades too, as has been shown for the
1930s in Britain in Daniel Ritschel, The Politics of Planning: The Debate on
Economic Planning in Britain in the 1930s (Oxford: Oxford University Press,
1997), but it was in the 1960s that the concept became most influential.
76. HoC debate, Mr Selwyn Lloyd’s Statement, July 25, 1961, vol 645, cc
220–221.
77. Astrid Ringe and Neil Rollings, “Responding to relative economic decline:
the creation of the National Economic Development Council,” Economic
History Review 2, (2000): 332; O’Hara, From Dreams to Disillusionment,
1–2.
78. Saint-Martin, Building the New Managerialist State, 72.
79. Quoted in Andrew Blick, “Harold Wilson, Labour and the Machinery of
Government”, in The Wilson Governments 1964–1970 Reconsidered, Glen
O’Hara and Helen Parr eds. (London: Routledge, 2006), 43.
80. MCA Annual Report, 1963; MCA Annual Report, 1964.
81. MCA Annual Report, 1965.
82. Figures for consultant numbers found by author in MCA: box 22.
83. MCA Annual Report, 1965.
84. Quoted in Blick, “Harold Wilson”, 54.
85. George Cox, interview with author at Bull Hotel, Hertfordshire on March
2, 2011. See Appendix 1 for biography.
86. Costs noted in “‘Neddy’ Plan to use management consultants,” Financial
Times, March 31, 1964, 1; see TNA: FG 2/254 for the publication Investment
in Machine Tools (London: HMSO, 1965), 1.
   Planning, 1960s–1970s  91

87. For a description of NEDO, see Ringe and Rollings, “Responding to relative
economic decline”, 332.
88. TNA: FG 2/254. “George Brown note to Sir Peter Runge, Federation of
British Industries,” March 29, 1965.
89. See TNA: MH 137/427 and TNA: MH 137/428 for details of Ministry of
Health assignments; The GPA report (Watford: GPA, 1964).
90. TNA: MH 137/427-8.
91. The Times, 12 May 1967, 27.
92. George Cox, interview with author; John Garrett, Managing the Civil Service
(London: Heinemann, 1980), 135. See Appendix 1 for biography.
93. See Table A1.
94. Figures from Ferguson, The Rise of Management Consulting, 189.
95. Garrett, Managing the Civil Service, 135.
96. Hennessy, Whitehall, 199.
97. See in particular, O’Hara, Governing Postwar Britain, 28–52.
98. See Davis, Prime Ministers and Whitehall 1960–74, 16; See TNA: CAB
128/35/51. “Conclusions of a Meeting of Cabinet,” September 21, 1961.
99. Ben Pimlott, Harold Wilson (London: Harper Collins, 1992), 517.
100. O’Hara and Parr, The Wilson Governments 1964–1970 Reconsidered, viii.
101. Ibid., ix.
102. Ibid., x.
103. Andrew Blick, “Harold Wilson, Labour and the Machinery of Government,”
in eds. O’Hara and Parr, The Wilson Governments, 79–98.
104. Andrew S.  Crines and Kevin Hickson, Harold Wilson: The Unprincipled
Prime Minister? Reappraising Harold Wilson (London: Biteback, 2016), xxix.
105. Gerald Kaufman, interview with author at House of Commons, March 8,
2011. See Appendix 1 for biography.
106. Pimlott, Harold Wilson, 515–19.
107. Ibid.
108. Davis, Prime Ministers and Whitehall 1960–74, 37.
109. See Bodleian Library, Oxford (hereafter BOD): Wilson papers, “March of
the Whitehall economists”, box Wilson c. 769.
110. See, for instance, O’Hara and Parr, The Wilson Governments 1964–1970
Reconsidered, ix-xii.
111. BOD: Wilson papers. Box Wilson c.1594. Wilson memo to the Secretary of
State for Wales entitled “The Machinery of Government,” December 6,
1967.
112. Tisdall, Agents of Change, 36–37.
113. Ibid.
114. See, for instance, Edgerton, Warfare State, 108.
115. See Davis, Prime Ministers and Whitehall 1960–74, 24.
116. O’Hara and Parr, The Wilson Governments 1964–1970 Reconsidered, ix.
117. See Davis, Prime Ministers and Whitehall 1960–74, 52.
92  A. E. Weiss

118. TNA: BA 1/60, Fulton Report Vol. 1, (London: HMSO, 1968) 2.

119. Hennessy, Whitehall, 199.
120. Fry, Reforming the Civil Service, 11.
121. Ibid., 17–18.
122. TNA: BA 1/2. “Minutes of the second meeting of the Fulton Committee.”
15 March 1966.
123. The “outsiders” staffing the Plowden Committee all had previous govern-
ment experience. By contrast, none of the consultants who staffed the
Management Consultancy Group had any previous connections with the
Civil Service or government. See Rodney Lowe, “Millstone or Milestone?
The 1959–1961 Plowden Committee and its Impact on British Welfare
Policy”, Historical Journal 40, no. 2 (1997): 471.
124. Tony Benn, Out of the Wilderness: Diaries 1963–67 (London: Arrow, 1987),
410.
125. O&M Bulletin 21, no. 4 (1966): 173–184; Fry, Reforming, 60.
126. Quoted in Fry, Reforming the Civil Service, 60; also in TNA: BA 1/20.
“Michael Simons report to Committee.”
127. Ibid.
128. TNA: BA 1/71. Memo by Michael Simons on “Committee on the Civil
Service: Investigation using management consultants – note by Secretariat.”
September 23, 1966.
129. Quoted in Fry, Reforming the Civil Service, 60; original document available
in TNA: BA 1/20.
130. More on Hunt’s perceived obstructionism of the civil service ‘mandarins’
towards the Fulton Committee can be found in Lowe, Official History of the
British Civil Service, 121–125.
131. Described in Saint-Martin, Building the New Managerialist State, 207.
132. TNA: BA 1/60, Fulton Report Vol 2 (London: HMSO, 1968), 100.
133. TNA: BA 1/72, D.C.  Lee memo to Mr. Wilding, “Fulton Committee  –
Management Consultants.” April 6, 1967.
134. JGarrett, The Management of Government, 150.
135. TNA: BA 1/60, Fulton Report Vol 2, 79; quoted in Hennessy, Whitehall,
195.
136. Davis, Prime Ministers and Whitehall 1960–74, 60.
137. TNA: BA 1/70. “Committee on the Civil Service. Sunningdale Conference –
the nature and requirements of Civil Service work. Note by the Secretary.”
Memo on Sunningdale Conference by Richard Wilding, Committee
Secretary. June 15, 1966.
138. TNA: BA 1/71. “Committee on the Civil Service. Management Consultancy
Group – Interim Report.” May 7, 1967.
139. TNA: BA 1/71. “Letter to the Permanent Secretaries” by Norman Hunt.
August 1966.
140. Fry, Reforming the Civil Service, 59.
   Planning, 1960s–1970s  93

141. Ibid., 63.

142. TNA: BA 1/72. “Fulton Committee  – Management Consultants” by
Michael Simons. December 19, 1966.
143. TNA: BA 1/70. “Committee on the Civil Service. Proposals for participa-
tion by Associated Industrial Consultants Ltd.” August 5, 1966.
144. Fry, Reforming the Civil Service, 65.
145. Ibid., 65–66.
146. TNA: BA1/71. Memo on MCG team composition by Michael Simons.
September 23, 1966.
147. Fry, Reforming, 66.
148. Ibid., 68.
149. Ibid., 70.
150. Ibid., 63.
151. Ibid.
152. R. H. S. Crossman and Anthony Howard, The Crossman Diaries (London:
Magnum Books, 1979), diary entry for 20 June 1968, 506.
153. Described in Davis, Prime Ministers and Whitehall 1960–74, 64.
154. TNA: MAF 331/45. “Treasury note on management consultants.” Sir
Laurence Helsby to Sir John Winnifreth, October 15, 1965.
155. Hennessy, Whitehall, 199.
156. William Armstrong, “The Civil Service Departments and Its Tasks,” O&M
Bulletin 25, no. 2 (1970), 63–79.
157. Ibid, 79; Fulton Report Vol 1, 104.
158. For more assignments see Table A1.
159. Kipping and Saint-Martin have suggested that the CSD served as a bulwark
to management consultancy usage as it also contained its own internal con-
sultancy practice to be used across the civil service. However this seems to
overstate the significance of the CSD in reducing consultancy use. There
were nonetheless a substantial number of consultancy assignments in this
period and the CSD also hired many consultants on a secondment basis
within its own consultancy unit. Kipping and Saint-Martin, “Between
Regulation, Promotion and Consumption”, 458; “The Civil Service
Department and Its Tasks”, O&M Bulletin 25, no. 2 (May 1970): 63–79.
160. Hennessy, Whitehall, 210–11.
161. A Better Tomorrow. Available on: http://www.conservative-party.net/manifestos/
1970/1970-conservative-manifesto.shtml, accessed May 14, 2011.
162. See Davis, Prime Ministers and Whitehall 1960–74, 117.
163. Ibid., 116.
164. Hennessy, Whitehall, 210–11.
165. Davis, Prime Ministers and Whitehall 1960–74, 88–89.
166. Geoffrey K. Fry, Policy and Management in the British Civil Service (London:
Prentice Hall/Harvester Wheatsheaf, 1995), 25.
167. See Appendix 1 for biography of Richard Meyjes.
94  A. E. Weiss

168. O&M Bulletin 23, no. 1 (Feb 1968).

169. O&M Bulletin, 23, no. 1 (Feb 1968).
170. O&M, Use of Management Consultants, 179.
171. For Ross’ unpublished paper on his work see TNA: HO 213/1595.
“Naturalisation history: including author’s notes for The History of
Naturalisation by J.M. Ross.” From a Cabinet memo where J.M. Ross was
secretary it is apparent he worked in the Home Office in 1939 too: TNA:
CAB 52/7, “Defence Regulations Sub-Committee.”
172. Quoted in ibid., 174.
173. Quoted in Tisdall, Agents of Change, 51.
174. George Cox, interview with author.
175. M.R. Gershon, “Working with a Management Consultant,” O&M Bulletin
21, no. 2 (1966), 64–68; George Cox, interview with author.
176. Edgerton, Warfare State, 190.
177. Gershon, “Working with a Management Consultant,” 68.
178. See “Expert to reshape gaol industries,” The Times, June 4, 1965, 8.
179. Vic Forrington, correspondence with author between March 3, 2011 and
March 30, 2011. See Appendix 1 for biography.
180. George Cox, interview with author, March 2, 2011.
181. The archival material available certainly supports Forrington’s recollection
that there was initial reticence in adopting Urwicks’ proposals. The consul-
tant report concluded: “in our discussions we have been made aware of the
major problems that will inevitably arise as part of implementation of the
­proposals…[however] we consider that despite the strategic and special sig-
nificance of the subject, many of the improvements needed to ensuring
meeting the future requirements of the Services and Sales can be achieved.”
Unfortunately, the archives shed no further light on whether these recom-
mendations were fully implemented as the consultants envisaged. TNA:
DEFE 68/8, Urwick, Orr & Partners Ltd., “Ammunition Production
Organisation Study,” March 2, 1970.
182. TNA: LAB 28/16/25. “Evidence to Royal Commission” Association,” 15.
183. TNA: LAB 10/2759. Ministry of Labour note, December 1, 1965; TNA:
LAB 10/2759. “The use of management consultants by smaller firms.”
February 1966.
184. TNA: T 224/2045. Board of Trade memo on “Industrial Efficiency and the
Consultancy Grants Scheme.” July 22, 1969.
185. BOD: Wilson. c. 1594, Wilson memo to Secretary of State for Scotland,
November 6, 1967.
186. House of Commons debate, Public Bodies (United States Management
Consultants), November 27, 1968, vol 774 cc682–692.
187. TNA: T 224/2045. Note on “Consultancy Grants Scheme”, July 1969.
188. Ibid.
   Planning, 1960s–1970s  95

189. A Better Tomorrow, http://www.conservative-party.net/manifestos/1970/

1970-conservative-manifesto.shtml, accessed April 11, 2011.
190. Manchester People’s History Museum (hereafter MPHM): Labour Research
Department Memoranda, RE 163. “A state management consultancy ser-
vice.” Memo by John Garrett, May 1975.
191. TNA: CAB 129/199/13. “White Paper on the Nationalised Industries,”
1978.
192. TNA: CAB 128/63/18. “Kirby Manufacturing and Engineering Company.”
May 11, 1978.
193. Bernard Donoughue, Prime Minister: The Conduct of Policy under Harold
Wilson and James Callaghan (London: Cape, 1987), 82.
194. Tony Benn, Conflicts of Interest: Diaries 1977–1980 (London: Hutchinson,
1990), diary entry for May 11, 1978, 300.
195. Antony Richard Malise Graham, correspondence with author between
February 15 and February 20, 2011.
196. Figures derived and analysed by the author from MCA: box 23.
 3
Reorganising, 1970s: The 1974 National
Health Service Reorganisation
and McKinsey & Company

The study I have to say in retrospect was a disappointment…I really was naïve
in thinking that we could have had as big an impact as I thought we might
have.1 (Henry Strage, Partner-in-Charge of NHS study, McKinsey & Company,
1987)

The National Health Service Reorganisation Act (England and Wales)

gained Royal Assent on July 5, 1973. It was a product of decades of political
wrangling, involving two Green Papers, one Consultative Document, one
White Paper, dozens of reports, and by the time the Act was implemented the
question of reorganisation had been considered by four Ministers or Secretaries
of State.2 The Act sought to unify healthcare in England and Wales. At the
Act’s core was the belief that the “tripartite” structure of care—hospital ser-
vices, primary care, and community services (see Fig.  3.1)—in place since
1948 was inefficient and placed too great an onus on expensive hospital care.3
What is of interest about this piece of administrative reform is its specific
concern with “management efficiency,” and that the American consultancy
firm McKinsey & Company—led by Henry Strage, whose quote above details
his views on the study—and a management studies team from Brunel
University were charged with addressing this concern.4
Whilst the reorganisation is important as a piece of—surprisingly over-
looked—technical administrative history, it is even more insightful as a case
study which illuminates major questions regarding the modern British state.5
The Conservative politician, and former Chancellor of the Exchequer, Nigel
Lawson famously likened the NHS to the “closest thing the English have to a
religion” and in constituting around one-fifth of total public sector ­expenditure

© The Author(s) 2019 97

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3_3
98  A. E. Weiss

Minister of
Health

Ministry of
Health
Board of
Health for
Wales

Local Health Regional Boards of Executive

Authorities Hospital Governors Councils
(146) Boards (14) (36) (140)

Hospital
Management
Committees
(377)

Health Visitors General General General Supplementary

Health Ambulance Hospitals and Teaching
Home Nurses Medical Dental Pharmaceutical Ophthalmic
Centres Service Specialists Hospitals
Domiciliary Midwives Service Service Service Service
Maternity Care Vaccination
Home
and Child After and
Helps
Welfare Care Immunisation

LOCAL AUTHORITY HOSPITAL COMMUNITY

Fig. 3.1  The “tripartite” structure of the National Health Service in England and
Wales, 1948. (Adapted from Webster, The National Health Service: A Political History,
21)

during this time period, it can be claimed to represent a major element of the
British “state.”6 And so through understanding how the NHS operated and
was influenced by external private sector agents we gain an important under-
standing of what the state is. Consequently this chapter is primarily con-
cerned with what the use of the consultancy services of McKinsey & Company
during the 1970s NHS reorganisation in England tells us about the nature of
the British state and state power.7
The case study in this chapter focuses on the specific political and adminis-
trative debates surrounding the NHS Reorganisation Act 1973 (England and
Wales), its implementation the following year, and in particular how the ser-
vices of McKinsey & Company were procured and used in this process.
Developments are also considered in Scotland, Northern Ireland, and Ireland,
with a recognition that the NHS has different operational models across
Britain’s jurisdictions. Indeed, their separate workings go some way to ques-
tioning the notion of a single “British” NHS, or even state.8 At all times, the
definitions of the “state” and “state power” applied are as described in the
Introduction to this book. However, before we embark on this specific case
study, two questions are addressed which provide essential context: how did
an American generation of consultancy firms enter into British consciousness;
and what benefits did contemporaries believe these consultancies were
bringing?
   Reorganising, 1970s: The 1974 National Health Service…  99

The Arrival of the Americans

We operated in a different stratosphere to Urwicks, PA and the rest [of the
British firms].9 (Barry Hedley, Boston Consulting Group, 1970–1976)

Overcoming initial apprehension from its directors, in April 1959 McKinsey

& Company established its first London office on 4 King Street.10 The com-
pany had originally viewed the creation of a “beachhead” in Europe as being
a gateway to helping “domestic [US] companies in expanding their interna-
tional businesses.”11 However, once the London office had opened (from
where the firm undertook a study assisting Royal Dutch Shell to change its
organisational form to a multidivisional model), the company quickly recog-
nised the desire from British companies to acquire McKinsey’s services. By
1966, McKinsey had worked for an impressive array of high-profile British
companies: Imperial Chemical Industries, Cadbury-Schweppes, English
Electric, English Steel, Rio-Tinto, Philips Electric, Rolls-Royce, Shell-Mex-BP,
Unilever, and Vickers.12 By 1968, it was believed that McKinsey’s 74 consul-
tants in its London office were bringing in revenues of £1.8 million. This may
have represented only 12 per cent of total MCA revenues in the period, but
McKinsey, with their far higher fees, averaged £24,300 in revenues per con-
sultant, compared with an MCA average of £7000.13 McKinsey were not the
only American consultancy firm operating in the United Kingdom in this
period; Arthur D.  Little, BCG, Booz Allen Hamilton, H.B.  Maynard,
Emerson Consultants, and others had all established offices or were undertak-
ing work in the country too.14 However, as highlighted in Table A.2, only the
first four of these firms had a substantial working practice in government or
state bodies in this period, and such was the ubiquity of McKinsey that The
Sunday Times even coined a verb to cover their work. Writing in 1968, the
journalist Stephen Aris explained:

“McKinsey” as: “1. V. To shake up, reorganise, declare redundant, abolish com-
mittee rule. Mainly applied to large industrial companies but also to any organ-
isation with management problems. See: British Broadcasting Corporation, the
General Post Office and Sussex University. 2. N.  An international firm of
American management consultants.”15

Consequently attention is focused on these four firms throughout this

chapter, and McKinsey—the first of these to develop a significant presence in
Britain—in particular in the case study.
100  A. E. Weiss

As Barry Hedley’s comment above highlights, in every conceivable way, the

American consultancy firms sought to differentiate themselves from their
British consultancy counterparts. Myth and reality blur here, although on
balance there were significant differences between the two generations. As
McKenna has conclusively shown, the origins of the American firms that
came to dominate the British headlines and concepts of “consultancy” in the
1960s and 1970s lay not in the time and motion studies of Taylorism (unlike
the Bedaux Company and its Big Four offshoots), but rather in the regulatory
changes of the US Glass-Steagall Act of 1933. McKenna has shown how the
separation of commercial and investment banking led to a demand for invest-
ment surveys for banks which firms like James O. McKinsey & Co. met.16 In
terms of recruitment practices, clear differences also emerge. In the 1950s,
British firms such as Personnel Administration sought recruits who were:
male, young, of grammar school education and “high but not brilliant intel-
ligence.”17 McKinsey, in the words of their influential managing director
Marvin Bower in 1979, on the other hand, believed: “in those early London
days, to establish a staff equivalent in calibre to our US staff [most of whom
had MBAs from business schools such as Harvard] we needed honours gradu-
ates of Cambridge and Oxford.”18 Similarly, as David Giachardi recollected
from his time consulting in the 1970s, the BCG also recruited “solely from
Oxbridge,” and Bernard Doyle, a consultant in the late 1960s, was hired by
Arthur D. Little after leaving Harvard Business School.19
Especially in terms of work undertaken, the Americans sought to distinguish
themselves from the Big Four. As we have seen in the previous chapter, although
in 1967 the majority of the Big Four’s work was in “production” or “finance
and administration,” 13 per cent of their work was in “company development
and policy formation”—exactly the type of work which the American firms
became famous for.20 Yet as the American firms increasingly became known for
high-level “strategy” work (“strategy” was a term made popular by the applied
mathematician Igor Ansoff’s 1965 book Corporate Strategy, though with a pro-
tean definition—in this period it broadly meant using an analytical and ratio-
nalist approach to the organisation of business affairs),21 the British firms
struggled to convince that they too were capable of high-profile strategy assign-
ments.22 As the Financial Times summarised in 1966:

All the [British] Big Four consulting firms have their origins in industrial engi-
neering, time and motion study, bonus schemes, and a variety of other tech-
niques designed to improve productivity in the manufacturing process. “They
did an excellent job on the shop floor”, says an American consultant, “but they
have never got out of that rut.”23
   Reorganising, 1970s: The 1974 National Health Service…  101

Such impressions stuck amongst McKinsey clients. Whilst discussing

whether or not the Fulton Committee should approach McKinsey, Michael
Simons was advised—following advice from Ronald German who had worked
with the consultants on the study of the Post Office in 1966—that “McKinseys
(sic.) tend to specialise in the field of higher management organisation. Their
greatest value is probably as catalysts to get people thinking about their own
problems. Their reports largely take the form of charts and graphs and they do
not write very much.”24
The ability of the American firms to position themselves as high-level man-
agement advisers meant they took on the most significant and prestigious
state assignments in this period. In this respect, they were greatly helped by an
increasing obsession with American “know-how,” a virtuous cycle of high-­
profile assignments furthering their standing and reputation, and some
smartly constructed friendships in elite circles. The work they undertook was
of long-standing significance in the development of the state in the 1960s and
1970s: changing management structures in a large number of state bodies,
and providing international perspectives on Britain’s problems.

American “Know-How”
Is Britain a half-time country, getting half-pay for half-work under half-hearted
management?25 (William W. Allen, American management consultant, The
Sunday Times, March 1, 1964)

Two years after the former US Secretary of State Dean Acheson issued a
zeitgeist-capturing critique of Britain’s lost sense of direction, another American
launched an assault on the national psyche. William W. Allen’s double-page
spread, quoted above, in The Sunday Times (which proved so popular the
paper took the unusual step of publishing it as a pamphlet) shocked readers
by claiming that: “for each person needed to produce a ton of steel in America,
three are needed in Britain; ships could be constructed with 40 per cent fewer
men if labour were employed efficiently; it takes three to six times as long to
build a house in Britain as it does in America.”26 British management consul-
tants tried to diffuse the positive attention Allen received, replying: “Let us
not be deluded into believing that North American management has a
monopoly on brains and ‘know-how’.”27 As explored in Chap. 2, in 1960s
Britain there were two competing solutions to Britain’s malaise: a British one
and an American one. Whilst the British solution has been long neglected in
histories and was more successful than hitherto appreciated, ultimately the
102  A. E. Weiss

American version triumphed. The British turn to American solutions in the

1960s was borne of complex factors, but changes to Britain’s empire status,
introspection arising from a national and international backlash against the
Suez episode, and a growing fascination with the perceived “American mira-
cle” meant that the interest with American “know-how” which been burgeon-
ing since the mid-1950s was growing in fervour.28
Central to the conditions of American financial assistance for postwar
reconstruction was an emphasis on European countries learning from the suc-
cesses of the American economy. In total, direct foreign assistance came to
around $15 million, which Britain matched and used to help form the Anglo-­
American Council on Productivity, the European Productivity Agency, and
the British Productivity Council.29 As Nick Tiratsoo has noted, as “Washington
saw it, unless the Europeans changed economically, they would not be able to
withstand the challenge of Communism.”30 The Anglo-American Council on
Productivity was one of the most celebrated of these initiatives. Set up by
Stafford Cripps in 1948, the Council sought to “promote economic well-­
being by free exchange of knowledge in the realm of industrial organisation,
method and technique, and thereby to assist British industry to raise the level
of its productivity.”31 A delegation of the Council led by Lyndall Urwick
extensively studied the American management consultancy industry, which
by the early 1960s collected total revenues of around $300 million and had
been by far the largest in the world since the late 1940s.32 However, according
to Tiratsoo, these attempts to spread the American “gospel of productivity”
into Britain in the 1950s failed as a result of “entrenched management culture
and institutional resistance,” with “those who ran British companies continu-
ing to believe vehemently that they knew best.”33
By contrasting Tiratsoo’s descriptions of British management attitudes
towards American “know-how” in the 1950s with the list of British clients
McKinsey served between 1959 and 1966, it is clear something dramatic
must have occurred between the early years of the 1950s and the mid-1960s.
It is likely that inimical attitudes towards American firms were not as
entrenched as first supposed, and that the increasingly alarmist concerns
about the state of the British economy in the 1950s and early 1960s forced a
quick reappraisal. It is also clear, from the previous chapter, that at the same
time as the pro-American approach was gaining traction, there was an influ-
ential, but nonetheless declining pro-British approach too. As the economic
historian Deirdre McCloskey has shown, British entrepreneurial failures were
frequently contrasted with American successes in the late 1950s, and in par-
ticular the American adoption of the multidivisional model of corporate
structure, which McKinsey was fêted for introducing to many American
   Reorganising, 1970s: The 1974 National Health Service…  103

firms.34 Thus by the early 1960s, with incomes policy, wage bargaining, and a
spate of bestseller publications questioning “What’s wrong with Britain?” all
at the forefront of political and commercial concerns, productivity was at the
heart of the discourse about how to revive Britain.35 The American consulting
firms were only too aware of the potential work this entailed. As Hugh Parker,
who led McKinsey’s London office, noted, in the 1950s and 1960s “we
believed the Atlantic was five years wide… [we sought] to give our clients
competitive advantage by closing this gap, even though the concept of com-
petitive advantage did not even exist in Europe at the time.”36
Consequently, whilst the American generation of consultancies originally
arrived in Britain expecting to serve American firms and their subsidiaries,
they quickly readapted their service offerings to meet the demand from British
clients for their unique brand of American “know-how.” Their clients were
keenly aware of the significance of their American origins. As we have seen, in
1966 Norman Hunt was averse to hiring “an American consultant alone” on
the Fulton Committee, when considering McKinsey. Two years later James
Selwyn (Selwyn was an Adviser to the Bank of England) wrote on July 22,
1968, regarding the appointment of management consultants to analyse the
Bank of England’s operating procedures:

The first problem is whether we should consider American consultants, or

whether we should rule them out on the grounds that we “ought to buy British”.
The best known consultants here are McKinsey and they are probably the only
ones we would need to consider. They have had some important assignments,
e.g., ICI, Shell, BP, Lever Brothers, Post Office, and more recently the BBC and
British Railways Board. Information seems unanimous that American consul-
tants are good [and one view is] that the Americans are several years ahead in
their techniques.37

When the Governor of the Bank, Leslie O’Brien, asked the Chancellor of
the Exchequer in 1968 whether the potential political fallout from hiring an
American firm rather than a British firm could be justified, the answer was
clear. In a private Bank memorandum to the Treasury, a senior official con-
fided: “the Governor personally consulted the Chancellor [Roy Jenkins] and
was encouraged to go for the best, even though this might mean McKinseys
(sic.). In making our choice we were fully aware of the reaction it was likely to
provoke amongst British firms.”38 The hiring of McKinsey dealt a sharp blow
to the confidence of the British firms; at a time of national introspection, it
was clear that even the most august state bodies favoured American “know-­
how” over British. Even the press took a similar view about the American-ness
104  A. E. Weiss

of McKinsey compared with their British counterparts. A cartoon in the Daily

Mail on October 30, 1968, by Trog showed McKinsey consultants as the
American mafia entering the Bank of England, with the caption “they say
they’re the American efficiency experts.”39 Indeed, the term the “McKinsey
mafia” would come back into fashion and reverberate around Whitehall cir-
cles in the 1990s.40 Then, and later, it is clear McKinsey were viewed in
patently un-British ways.

Friends in High Places

The Firm was fortunate in having Hugh [Parker] as resident manager [in the
London office]. A graduate of Cambridge University, he understood the British
and had the added advantage in Britain of having rowed for the University.41
(Marvin Bower, Managing Director, McKinsey & Company, 1950–1967)

A large part of McKinsey’s success in winning the “plum” state assignments

that its competitors (and especially the Big Four) yearned for was due to the
firm’s marketing strategies.42 The first significant move was to build connec-
tions with senior state officials. In this respect, it seems clear that in seeking to
build a market for their services, McKinsey diagnosed (like Anthony Sampson
had done in 1962) that power in the British state lay in an elite cadre of well-­
connected civil servants, as Marvin Bower’s quote demonstrates.43 In 1966,
Bower and David Hertz (another McKinsey partner) approached Alcon
Copisarow with a view to joining McKinsey. Copisarow had led a distin-
guished career as a civil servant and, when interviewed on the matter in 2011,
recalled being reluctant to be seen in the civil service as a “quitter.”44 However
after discussing the offer with others, including Tony Benn (who had employed
McKinsey previously and whom Copisarow had worked for) and being
advised that they had done a “good job” for Benn, Copisarow decided to
accept and become the first non-American worldwide director of the firm.45
At least two highly significant state assignments arose as a result of Copisarow’s
connections. The first was the establishment of British Gas. As Copisarow
recounted:

Sir Henry Jones, Chairman of the [Gas] Council, who I’d known for many years
[through sharing the train to London from our homes in Great Missenden] and
whose advice I had sought initially on the advisability of joining McKinsey,
asked if I could help tackle the entirely new problems and opportunities that lay
ahead for his industry, which was now being nationalised.
   Reorganising, 1970s: The 1974 National Health Service…  105

The second assignment was even more high-profile—the reorganisation of

the management structure of the Hong Kong government.46 Again Copisarow’s
personal connections proved vital:

In 1971, Murray Maclehose, a colleague with whom I had served at the Paris
Embassy in the 1950s…came up to me at the Athenaeum [a prestigious London
members’ club] and said, “You know, Alcon, I’m off to Hong Kong shortly as
Governor…Hong Kong has management problems we need to solve, they will
be my problems and I don’t know the first thing about management. Come out
and help.”47

McKinsey subsequently did indeed support the Hong Kong government

over most of 1972 to “strengthen the machinery” of government. Based on
in-depth interviews with senior officials, reviews of practices in the United
Kingdom, the United States, and Sweden, and observations of senior officials’
activities, the consultancy made four recommendations: to introduce annual
operating plans; to formalise the process and extend the coverage of long-term
programme plans; to formalise the process and extend the coverage of resource
plans; and to introduce processes for measuring performance against plan.
In addition, McKinsey proposed a number of “trials” to be evaluated, cover-
ing improvements to the Medical and Health Department, the Royal Hong
Kong Police, and the development of secondary education.48
Copisarow’s connections also helped the assignments he undertook.
Recalling his work in charge of McKinsey’s study of the operations of the
Bank of England, Copisarow noted: “Fortunately I had personal contacts…
[in order] simply to learn how the Treasury and the Bank worked together
with a view to regulation, the explanations of two former civil service col-
leagues, Sir Douglas Allen and Robert Armstrong, were very helpful.”49 The
personal friendships of well-connected individuals (many of whom were
members of elite London members’ clubs such as the Athenaeum) appeared
to have been a key factor in the emergence of American consultancy firms in
the 1960s.50
Copisarow’s decision to move to McKinsey helps to shed further light on
the postwar British “warfare state” which David Edgerton has written on. In
Edgerton’s view, the Wilsonian “white heat” moment marked the “ending
rather than the beginning of an overweening enthusiasm for national technol-
ogy. Labour ended many large-scale techno-national projects and was hostile
to many that survived…this was the end of the state research corps as a grow-
ing self-confident sector.”51 Copisarow’s experience reinforces this view, and
shows the growing esteem in which consultants were held. Educated at Imperial
106  A. E. Weiss

College of Science and Technology, Copisarow was emphatically a scientist

working within the warfare state. In turn his roles included: Scientific
Counsellor at the British Embassy in Paris; Director of the Forest Products
Research Laboratory in the Department of Scientific and Industrial Research;
Chief Technical Officer at the National Economic Development Council; and
finally Chief Scientific Officer in the newly formed Ministry of Technology.
Reminiscing in 2014, Copisarow recalled his initial excitement at the creation
of the Ministry of Technology (MinTech), “[with a] remit to guide and stimu-
late a major, all-embracing national effort to bring advanced technology and
new processes into industry.” However, this enthusiasm soon dissipated in the
face of “recruitment [problems],” a lack of influence—“it was wrong to have
a Ministry of Technology with no say at all in the government’s largest stake
of all in technology, our aircraft industry”—and failure to address what
Copisarow perceived to be the key problems at the time: “managerial effec-
tiveness, the attitudes of labour, inadequate skills and training, the size and
structure of firms and under-investment.” Implicitly agreeing with Edgerton’s
description of the ending of the “enthusiasm for national technology,”
Copisarow ultimately concluded that “the ‘white heat’ election manifesto was
a winner, but in office it amounted to little.”52 More significantly, by leaving
his senior civil service post for McKinsey, Copisarow clearly felt he was better
placed to achieve his goal of “making industry competitive and managers to
be dissatisfied with the status quo” outside, rather than inside, the civil service,
despite the supposed new dawn of the “white heat” movement. According to
Copisarow, even Tony Benn, his minister at MinTech, agreed, telling him:
“You must accept [McKinsey’s offer].”53
The second area in which McKinsey (and their fellow American firms) suc-
ceeded in furthering their reputation was in aiming for the most high-profile
assignments. As the Financial Times noted, “most consultants agree that even
if State work is not the most profitable it certainly carries prestige value.”54
More than this, it is clear state work brought with it much publicity. For
instance, Barry Hedley believed the BCG’s work for the Department of
Industry was a “great opportunity to get paid to set out what we did.”55 The
work which McKinsey & Company undertook for the British Transport
Docks Board highlighting the “development of the container movement” was
praised in the Commons by Barbara Castle.56 Castle pronounced, “I seriously
recommend the House to read the McKinsey Report, because it has signifi-
cant lessons for us throughout the whole of transport.”57 The subsequent
debate proceeded to refer to the report on no fewer than 16 occasions. Such
high praise was likely to lead at the very least to further interest in the firm, if
   Reorganising, 1970s: The 1974 National Health Service…  107

not actual work. As Copisarow recalled, McKinsey were “delighted” with the
publicity when a debate was forced in the Commons on whether the govern-
ment could overturn the Bank of England’s decision to hire an American
company (which it could, although chose not to).58
Networks of senior state officials also meant that word of mouth was likely
to be another positive means of securing further assignments. For example,
Hugh Parker believed that:

The steel corporation study…led to the next major nationalised industry client
and that was the British Railways Board. I don’t know this for a fact, but I sur-
mise that the chairman of the British Railways Board, Sir Henry Johnson, had
obviously talked with Melchett [of the steel corporation], presumably got a
good report on us and then invited us to talk to them about a study for the
British Railways Board.59

Such referrals were not confined to state industries only. When interviewed
in 2011 Barry Hedley recalled that BCG’s work for ICI’s Plastics Division in
the early 1970s led the Deputy Chairman of the Plastics Division, Norman
McLeod, to introduce BCG to the senior civil servant Peter Carey, then the
Deputy Secretary at the Department of Industry. Hedley recalled how Carey
“immediately liked our stuff and saw national implications for the work we
were doing…it was clear to me Peter Carey was the mover to make things
happen and wanted BCG.”60 The validity of this impression can be ascer-
tained by the fact that in 1975, BCG were asked to undertake a study on the
future of the British motorcycle industry for the Department of Industry,
where Carey was now Second Permanent Secretary.

Case Study: The 1974 NHS Reorganisation

This case study addresses five questions concerning the British state. First,
why were management consultants used during the NHS reorganisation?
Second, what does the use of consultants tell us about how state reform was
influenced by political parties in this period? Third, what light does the NHS
reorganisation case study shed on the nature of state power, and in particular
the concept, forwarded by R.A.W. Rhodes, that the state is “hollowed-out” by
consultancy firms?61 Fourth, what do the differing NHS reorganisation expe-
riences in England, Wales, Scotland, and Northern Ireland imply for the con-
cept of a coherent British state? And fifth, what has been the lasting impact of
the reorganisation on the state?
108  A. E. Weiss

The histories of the NHS have largely categorised the 1974 reorganisation
as a failure. The four leading historians of the health service have criticised the
change as being at best an adequate compromise yet one which heralded an
exponential increase in bureaucracy. For Geoffrey Rivett, the reorganisation
created a “bureaucratic structure of mind-boggling complexity,” though the
“outcome remained the best available compromise.”62 Charles Webster found
it “scarcely credible that such an unsatisfactory result as the 1974 reorganisa-
tion should have emanated from a lengthy planning exercise.”63 Rudolf Klein,
like Rivett, acknowledged the unenviable conflicts of interest at play and felt
the “reorganisation can be seen as a political exercise in trying to satisfy every-
one [while reconciling] conflicting policy aims: to promote managerial effi-
ciency but also to satisfy the professions, to create an effective hierarchy
for transmitting national policy but also to give scope to managers at the
periphery.”64 Rodney Lowe humorously described the reorganisation as lead-
ing to a “Byzantine structure in which there were too many tiers of adminis-
tration and in which senior executive officials were responsible to authorities
which might include among their members one of their subordinates.”65 More
recent assessments have claimed that the 1970s changes represented a period
of “consolidation” for the health service, one during which “more ambitious
reforms were avoided.”66 Scant evidence exists to justify a rehabilitation of the
reorganisation.67 The analyses of Klein, Webster, and Rivett remain largely
sound. By contrast, this case study seeks to understand the historiographically
neglected, though significant, relationship between the NHS, the state, politi-
cians, and consultants involved in the reorganisation. In doing so, this chapter
considers whether Klein is correct that McKinsey & Company’s influence on
the changes was minimal, “reflected chiefly in the rhetoric of reorganisation –
in the jargon that clothed the proposals and in the small print of the admin-
istrative changes.”68 This chapter also considers what light this particular
episode sheds on future developments in the NHS’ relationship with manage-
ment consultants. And it also challenges a number of commonly held histo-
riographical shibboleths regarding the British state, in particular if there is
such a body as a “British” state, and if the role of politicians in public sector
reform has been exaggerated.
There are four dominant views regarding consultancy and the NHS. First,
contemporary accounts of why the NHS procures the services of firms such as
McKinsey & Company propose the following rationalisation: self-interested
collusion (the so-called revolving door syndrome) and an often grudgingly
made suggestion that such consultancies may possess “expertise” in the fields
of organisational change which are not held within the procuring organisa-
tion.69 This latter position appears to be largely the view held in the 1970s,
   Reorganising, 1970s: The 1974 National Health Service…  109

with numerous contemporary figures pre-echoing later claims.70 As a conse-

quence, the notion that civil servants in the Department of Health and Social
Security (DHSS) would both actively solicit external advice and prioritise
developments in an area so technical as “management efficiency” seems clearly
at odds with views of an elitist, closed civil service, and instead points to a civil
service receptive to external managerial expertise.71
Second, British histories are dichotomised by political partisanship. Almost
every study of post-twentieth-century Britain divides itself into chronological
segments driven by the electoral cycle.72 Buttressing this explicative frame-
work is the belief that post-1960s Britain was an era of political conflict and
discord, which shunned away from the consensus which founded the welfare
state. Thus the writings of the historians Keith Middlemas, Peter Kerr, and
others emphasise the discontinuities of the Wilson and Heath administra-
tions. And of course, within this narrative of conflict lies the claim that
Thatcherism marked a dramatic shift in the nature of British politics, radically
departing from all that went before it.73 However, as this case study explores,
the fact that the NHS reorganisation passed through the care of multiple
political administrations challenges this politically dichotomised view of
Britain.
Third is the concept of the hollowed-out state.74 Both contemporary and
academic accounts of the period allude to civil servants and politicians blindly
accepting the recommendations of consultants, giving credence to Alfred
Kieser’s claim that consultants treat their clients like “marionettes on the
strings of their fashions.”75 Other theories of state power have suggested that
“path dependency” on consultancy services started in the 1960s and that this
development helps to explain the large sums spent on consulting in the
twenty-first century.76 Here we test how accurate Kieser’s claims are, as well as
whether “path dependency” is a useful prism through which to view state
relationships with external private sector agents.
Fourth, the history of the reorganisation of the NHS engages with
J.G.A. Pocock’s “New British History” concept of “three kingdoms” in British
histories.77 Whilst twentieth-century historians such as Peter Hennessy,
Rodney Lowe, Peter Clarke, and others may write celebrated histories of
“Britain,” the uncomfortable fact that the jurisdictions of the United Kingdom
have materially different histories and cultures is usually spared little more
than a few paragraphs of apologia.78 Yet older, medieval, and early modern
histories of Britain such as Pocock’s consider these differences. The Pocockian
influence is most keenly felt in pre-twentieth-century accounts. Yet modern
British historiography still abounds with “British” histories which deem devel-
opments in Scotland, Wales, and Northern Ireland to be largely coterminous
110  A. E. Weiss

with those in England. This is particularly true in accounts of state reform:

Michael Burton’s The Politics of Public Sector Reform describes how “there are
some differences between the way [public] services are managed in England,
Scotland, Wales and Northern Ireland but in the main I provide an overview
across the United Kingdom,” for instance.79 Through analysing “Britishness”
through the lens of this case study we can unpick how diverse the four juris-
dictions are in operations and structure, and whether this conflicts with
accounts of a “coherent” state.

Chronology of the Reorganisation

The formation of the NHS in 1948 saw the coming together of over 1000
voluntary hospitals, 3000 public hospitals, and numerous GP practices into
an umbrella organisation which divided healthcare into three elements: the
hospital services, community services, and general practitioners (GPs). Whilst
this achievement was momentous, it did not take long before its organisa-
tional form was called into question. The 1956 Guillebaud Report, though
primarily focused on analysing the costs of the health service, contained a
report on the structure of the NHS by Sir John Maude.80 Maude, previously
Permanent Secretary in the Ministry of Health during the Second World War,
criticised the health service structure and recommended that control of the
service revert to local government. This presaged debates regarding local
authority versus medical profession influence on the NHS that would arise
during reorganisation planning. A few years later another influential report
castigated the structure of the service, this time recommending a different
solution. The 1962 Porritt Report, from the British Medical Association
(BMA) and chaired by the president of the Royal College of Surgeons, pro-
posed that the tripartite division of services be unified under single area
boards. Area boards would emphatically not be under local authority control
and the medical profession would be strongly represented on the boards. To
this end Arthur Porritt recommended that the board be run by a chief officer,
who was also a doctor. Porritt’s surgical career and the report’s BMA backing
led to this view becoming the prevalent one amongst the medical profession.81
Providing yet a different solution, the Farquharson-Lang Report (published
only in Scotland) of 1966 proposed that regional and local health boards
should employ a chief executive to run them, who need not have medical
qualifications.82
Reports criticising the status quo abounded. The 1956 National Institute
of Economic and Social Research Report, 1959 Cranbrook Report, 1962
   Reorganising, 1970s: The 1974 National Health Service…  111

Hospital Plan, 1963 Gillie Report, 1963 Development of Community Care

Review, 1966 Salmon Report (also published in Scotland only), 1967
Cogwheel Report, 1967 King’s Fund Report, and 1968 Seebohm Report to
varying degrees also critiqued the “tripartite” structure. These reports claimed
that the structure led to gross inefficiency and an overfocus on the acute hos-
pital care element of the health service rather than the preventative commu-
nity and GP setting. They also criticised the management and running of
hospitals.83 By the end of the 1960s, there was a question mark hanging over
the future structure of the NHS which would prove hard for civil servants and
politicians to ignore.
The genesis of this drive for reform can be found in the wider context of the
era. Planning, management, and organisational reform became highly fash-
ionable from the 1950s onwards.84 The pressure for NHS reform was signifi-
cantly increased during the 1960s as the Local Government Commission
(followed by the Redcliffe-Maud Royal Commission) emphasised the need
for reform of the structure of local government. Given the inherent interlink-
ing between the health services and local government, the Commission’s exis-
tence made it almost inevitable that the NHS would face similar treatment.
Within the health service, by January 1967 key figures such as Sir Arnold
France, Permanent Secretary at the Ministry of Health, and Sir George
Godber, Chief Medical Officer, actively supported plans for reform broadly
along the lines of the Porritt Report.85
Despite these internal and external pressures, it was not until November
1967 that Kenneth Robinson (Minister of Health from 1964 to 1968 when
the DHSS was formed) publicly acknowledged the need for reform of the
NHS.  Up until this point, Robinson had shared the Ministry of Health’s
reluctance to change, instead espousing a policy of “improving cooperation”
between the different elements of the Service.86 Robinson and the Ministry
were likely to have been wary of opening the Pandora’s box of conflicting
vested interests that would (and did) arise from reorganisation. However, the
combination of the swell of high-profile reports in favour of reform coupled
with planned local government changes meant the policy of “cooperation”
would not be sustainable in the long term. On November 6, Robinson
acknowledged to the House of Commons that “the tripartite structure is
unwieldy” and that he would be undertaking studies into improving this situ-
ation which would “entirely relate to the administrative pattern [but not
financial pattern]” of the health service.87 Thus from November 1967 onwards,
Robinson and the Ministry began the task of understanding how to reorgan-
ise the structure of the health service’s 14 regional hospital boards which over-
saw 377 hospital management committees (teaching hospitals were overseen
112  A. E. Weiss

separately by 36 Boards of Governors), 177 Executive Councils which bore

responsibility for over 22,000 GPs, and 174 local authorities which delivered
community care (see Fig. 3.1).
The result was the 1968 Green Paper. Here, Robinson’s proposed unifica-
tion of the health service was broadly along the lines of the Porritt Report’s
recommendations for area health boards—f which there would be between 40
and 50. These would each be responsible for planning health services for
between 750,000 and 2,000,000 people. Regional hospital boards would be
abolished. The Green Paper was roundly criticised, particularly by the regional
hospital boards, whose members felt that the areas would be too large to plan
and operate services effectively.88
Consultation on the Green Paper coincided with the formation of the DHSS
and Richard Crossman’s move to Secretary of State of the department. Crossman
took responsibility for continuing Robinson’s work. Facing opposition to the
first Green Paper, Crossman launched a second Green Paper in 1970, allaying
some of the concerns raised by the first. In this iteration, the 14 regions (now
entitled Regional Councils) were retained with planning responsibilities, and
there were a greater number of area health authorities (AHAs)—90—which
would be coterminous with the newly proposed local government boundaries.
The boards of the AHAs would be represented by one-third of appointments by
the Secretary of State, one-third from local authorities, and one-third from the
health profession. This was a relatively palatable compromise for the various
groups concerned with avoiding too much or too little local authority or medi-
cal profession representation.89 Crossman’s plans also included around 300 “dis-
trict” areas, which would co-ordinate services at a local level but not be
coterminous with local government districts, in a clear attempt to avoid further
clamour for local government control of the health service. These plans were the
brainchild of the influential Chief Medical Officer, George Godber, and known
as “Godber bricks.”90 Though progress appeared to be being made, the 1970
General Election disrupted consultation plans for the second Green Paper.
During the 1970 election campaign health service reform barely featured.
However, by the summer, Keith Joseph, the new Secretary of State at the
DHSS, noted that “the economic and other gains we want [from the health
service] could not be secured without administrative unification of the whole
of the National Health Service.” Joseph’s plans for reform barely deviated
from the second Green Paper, with one significant exception. With a back-
ground in industry, Joseph diagnosed that the key to a more effective health
system was “strong management”—this was symptomatic of the Conservative’s
general, and Ted Heath’s particular, belief that “management” and making the
state more “business-like” would ameliorate Britain’s economic growth.91
   Reorganising, 1970s: The 1974 National Health Service…  113

Joseph launched a hastily drafted Consultative Document in May 1971, with

a White Paper following in July.
The Consultative Document of 1971 had already predetermined the broad
structure of the NHS; there would be regions and areas and districts, with
areas being coterminous with local authority boundaries.92 The precise ques-
tion of how the management arrangements of these bodies were to work in
practice (e.g. how the areas would report to the regions; how the areas would
plan and manage their services; and how the districts and areas would work
with local authorities) was deemed an “intractable problem” by officials, and
one best left to “experts” on the subject.93 For their perceived management
expertise, the consultancy firm McKinsey & Company were therefore called
in to support a “Management Study Group” (MSG), working alongside a
team from Brunel University. McKinsey developed hypotheses which were
tested through interviews, reviewing existing policy, and comparing experi-
ences from other health services; these hypotheses ultimately attempted to
answer what the most efficient management arrangements would be to enable
“satisfactory integration all three branches of the Service.”94 Producing the
“Grey Book” which outlined their findings in 1972, the recommendations of
the Study Group were accepted in full by the Government in February 1973.
McKinsey’s work was scheduled to run from July 1, 1971, to December 31,
1972, though was slightly extended to March 1973. The consultants’ work
formed the core of the MSG chaired by the Assistant Secretary of the
Department, Francis David Kennard Williams. The MSG reported to the
reorganisation steering committee chaired by the second permanent secretary
of the department, Philip Rogers.95 Though the study cost a total of £143,760,
owing to McKinsey’s high fees, the team was relatively light in numbers.
Henry Strage (Engagement Director), Roderick Taylor (Engagement
Manager), Christopher Stewart (Engagement Manager), and Robert Maxwell,
James Lee, John Banham, Michael Brandon, and David Henderson-Stewart
served the department over the 18-month period.96 In terms of the consul-
tants’ backgrounds, Strage held an MBA from Columbia University; Banham
held a First in Natural Sciences from Cambridge and was educated at
Charterhouse School; and Henderson-Stewart was educated at Oxford and
Eton. These three examples serve to underscore the importance McKinsey
held of the purported “calibre” of their hires, as highlighted by Bower earlier.
It seems likely the consultants would have felt at ease with their direct civil
service counterparts; Williams, the day-to-day link for McKinsey, was edu-
cated at Stonyhurst College and Oxford, before joining the Ministry of Health
as a Principal in 1961. And Rogers was educated at William Hulme’s Grammar
School in Manchester before obtaining a First Class degree from Cambridge
114  A. E. Weiss

in history and economics. Rogers, through serving in the Colonial Office as

an establishment officer, developed a keen interest in management, and spe-
cifically personnel management, which he continued throughout his career,
becoming second permanent secretary in the newly formed CSD in 1969
before joining the DHSS as its permanent secretary in 1970.
McKinsey’s terms of reference were set out as to: “[take] the basis of the
Government’s consultative document on NHS reorganisation, and taking
account of other relevant studies commissioned by the Secretary of State, to
make recommendations on management systems for the services for which
regional and area health authorities will be responsible and on the internal
reorganisation of those authorities.”97 In practice this meant the consultants
had to take as a given the recommendations of the 1971 Consultative
Document regarding the structure of the NHS, and focus solely on the man-
agement arrangements within the new structure.
The consultants split their study into three phases; the first, to develop “work-
ing hypotheses” for the future management arrangements; the second, to “test”
these hypotheses in representative regions; and the third, to finalise the hypoth-
eses into recommendations and syndicate the findings. As Fig. 3.2 demonstrates,
McKinsey’s approach involved taking the Consultative Document as the starting
point of “hypothesis development,” and working through the predetermined
structure, developing deeper levels of details for “responsibilities, structures and
management processes” within the new framework for the health service.
This approach was standard for the consulting firm. As Marvin Bower,
wrote in 1979, McKinsey consultants’ “principal activity on a study is solving
problems. It calls for defining the real problem, gathering and analysing facts
and opinions, developing and testing creative hypotheses, and choosing one
of the hypotheses as a solution. Although performed collectively by a team,
problem solving is an intellectual activity that requires individual analytical
skill, creativity, and judgement.”98 In practice, the Study Group seemed to
find the approach confusing. In the January 1972 Steering Committee, the
McKinsey consultants stressed that “during Phase 1 of the study which began
on July 1, 1971 hypotheses have been developed and written to open up dis-
cussion of controversial issues. They are therefore stated in an often bold and
uncompromising manner. Nevertheless, they are still tentative and incom-
plete. In some cases alternatives are put forward; but even where a single
hypothesis is stated, it is equally tentative, and remains to be tested against the
facts of the actual situations that will be examined in Phase 2 now beginning
in the areas selected as typical. Final proposals will be put to the steering com-
mittee in June 1972.” The emphasis on the “bold and uncompromising
­manner” is likely to have been instructive.99 As McKinsey developed “hypoth-
 NHS REORGANISATION PLAN OF WORK FOR STUDY TEAM
Implication Implications from Implications of new
S of new working on local DHSS organisations
DHSS authority and systems
organisation relationships
and system

Summarise Test Region No. 1

needs (i.e., job - Develop details of
Translate
to be done and structure and
concept of
feature to be processes
consultative Select working
built in) at - Test feasibility
document into hypotheses for new
each new level - Plan implementation
practical terms structure and Prepare and discuss
in structure processes draft definitions for
Test Region No. 2
Review each level of authority Prepare and
Evaluate - Develop details of
available Identify areas and on: communicate detailed
alternatives structure
material and issues requiring - Responsibilities and recommendations and
against - Test feasibility
comments detailed analysis interrelationships implementation
needs - Test implementation
from external - Internal structure programme
sources Develop Agree a basis for - Management
Other ‘test’ situations
feasible range testing hypothesis processes
- Set up project teams
Develop of (study plan for Phase
to study specific
understanding organisational II)
issues in depth
of existing and process
situation alternatives
Study additional issues

Plan coordinate field

work to ensure
synthesis in design
or organisation
Feedback loop for additional structure and
fact finding and analysis management
processes

Implementation of
PPB study
  Reorganising, 1970s: The 1974 National Health Service… 

Phase 1 (about 4 months) Phase 2 (6-9 months) Phase 3 (6 months)

Fig. 3.2  McKinsey study team work plan. (TNA: MH 159/384. “Meetings of Steering Committee.” November 11, 1971)
115
116  A. E. Weiss

eses” on the nature and size, management responsibilities, and operations of

proposed Regional Health Authorities (RHAs), AHAs, district management
teams, and supporting bodies, some Steering Committee members were
clearly uncomfortable, having to be reminded by the chair on the November
11, 1971, committee that members were asked only to “approve continued
investigation of hypotheses,” not specific points per se.100
During the second phase of McKinsey’s support, the consultants sought to
“develop detailed working descriptions of the proposed planning process…
getting people to change the way they carry out their jobs, make decisions,
allocate resources and control their activities. We need to develop practical,
live examples with a few selected units. Once fully tested, these models will
serve as a basis for preparing detailed guidelines and providing others with
concrete examples of what is expected.”101 McKinsey, in conjunction with
other members of the Study Group, undertook such “field testing” in
Berkshire, Doncaster, Hillingdon, Lambeth and Southwark, Nottingham,
and Oxford over the period from March to June 1972.102 Such field testing
was a consultative process; according to the report on field testing in Oxford,
“representative groups,” “local working parties,” “individual specialist groups,”
and “patient groups” were formed with whom the proposals were tested.
In most instances, the “early hypotheses” were adopted, however—demon-
strating the consultative nature of the approach—in Lambeth and Southwark
the proposed creation of an AHA in the region was rejected. The Study Group
found “the proposed area has been consistently challenged throughout the
study; indeed no one interviewed in any of the three parts of the health ser-
vices in Lambeth and Southwark supports the concept. Therefore, AHAs in
London should be larger than the department proposes the outer boundaries
of the AHA should be, as far as possible. Coterminous with borough bound-
aries, but ‘exceptions should be made.’”103
After testing the hypotheses, the McKinsey team set about writing up the
study which would form the so-called Grey Book. However, intriguingly, the
third phase of their support also included extensive “speaking engagements”
which the DHSS was charged for. As Henry Strage wrote to F.D.K. Williams
on April 18, 1973, “John Banham and James Lee ‘have given talks to over 20
NHS integration courses and senior management courses.’” Strage was at
pains to point out the additional expenses such talks to universities and inter-
est groups were incurring, although the department seemed willing to accept
the cost. This is important, because the department could have chosen inter-
nal staff to deliver such talks. The fact it did not sheds light on the extent to
which McKinsey were both seen externally as the authors of the Grey Book,
and, implicitly, the degree to which the department felt capable or willing to
declare the Grey Book its own work.104
   Reorganising, 1970s: The 1974 National Health Service…  117

Following the production of the Grey Book, the 1973 NHS Reorganisation
Act received Royal Assent and was implemented on April 1, 1974, in England
and Wales. This created 14 RHAs and 90 AHA. The AHAs were “accountable
to the RHAs for the effectiveness and efficiency of their service provision.”
Service provision would be “managed and co-ordinated” through 205 District
Management Teams. A total of 207 Community Health Councils were
formed to represent the views of the public to the AHAs. GPs would deliver
their services via Family Practitioner Services, which were overseen by 90
Family Practitioner Committees (see Fig. 3.3).105 In Scotland, reorganisation,
along the lines of the prior Porritt Report, was settled in 1972 with the issues
of local government representation which delayed much of the reorganisation
process in England and Wales failing to provoke strong feelings. In Northern
Ireland, owing partly to the government of Stormont ceding control to
Westminster in 1972 but also because in Northern Ireland health services and
local government had been relatively integrated since 1948, no structural
reorganisation took place.106

Secretary of Corporate accountability

State for Social Individual officer or joint
Services
Department of
team responsibility
Health and External relationships
Social Security

AREA
Regional Health Boards of
Authorities (14) Governors of
London
Postgraduate
Hospitals
REGION
Joint
Consultative Area Health
Committees Authorities (90)

Community DISTRICT District

Health Management
Councils(207) Teams (205) Family
Practitioner
Committees (90)
Hospital,
Specialist, and Family
Community Practitioner
Health Services Services

Fig. 3.3  The reorganised National Health Service in England, 1974. (Adapted from
Hunter, “Organising for Health: The National Health Service in the United Kingdom”, 108)
118  A. E. Weiss

Secretary of Management
State for Health Contracts
Administration
Department of
Health

NHS Executive
(HQ)

Regional Offices
(8)

Health NHS Trusts Special Health

Authorities (108) (429) Authorities (13)

GP Fundholders General Medical

(13,423) Practitioners (31,748)
General Dental
Practitioners (15,951)
Pharmacies (9,787)
Ophthalmic
Contractors (6,778)

Fig. 3.4  The National Health Service in England, 1997. (Department of Health,
Departmental Report (London: The Stationery Office, 1997), Annex E)

The legacy of the 1974 reorganisation was weak, however. The reorganisa-
tion was lambasted by the press, political classes, much of the medical profes-
sion, and even the consultants who worked on the study. By 1982 much of the
1974 reforms were repealed and by 1997 the structure—though just about
recognisable in nature as there were still regions, special areas, and areas—was
manifestly different from only 21 years earlier (see Fig.  3.4). Yet the 1974
reforms marked a turning point in the history of the NHS, from a state of no
reform since inception to almost continuous structural revolution.

A Highly Receptive State

We have no doubts about the soundness of the proposed programme nor about
the quality of the consultants. (F.D.K. Williams, Permanent Under Secretary
DHSS, 1972)107
   Reorganising, 1970s: The 1974 National Health Service…  119

Like other public sector bodies in the period, the health service was no
stranger to the planning boom of the late 1950s and early 1960s.108 During
this period the Oxford Region set up a work study unit in conjunction with
Westminster Hospital and the Work Study Department of ICI.  A greater
focus on management efficiency was encouraged by influential bodies such as
the Action Society Trust, Nuffield Provisional Hospitals Trust, and King’s
Fund.109 The Ministry of Health procured a number of management consul-
tancy assignments via the Management Consultants Association during 1959,
and in the same year, on the recommendation of the Royal College of Nursing,
established an NHS Advisory Council for Management Efficiency, which
operated alongside the Ministry’s own Organisation and Methods Unit.110 As
Lord Owen, Minister of State for Health between 1974 and 1976, said of the
Department of Health Social Security, “the department was in no way a feisty,
fussy place” and was instead welcoming of external advice.111 In short, the
health service was anything but inimical to management ideas or methods.
The Treasury’s drive for greater financial efficiency—and its growing fear of
the scale of health expenditure—also meant that it actively sought to instil a
strong management ethos within the NHS. During evidence for the Fulton
Commission in 1966—supported by management consultants from AIC
Limited—“acrimonious and unfruitful exchanges between the Ministry of
Health and Treasury” took place, with the Treasury resurrecting plans espoused
by Lord Taylor, a former medical journalist, to “devolve the management of the
NHS to a separate national board or public corporation.”112 Such pressure from
the Treasury continued during 1968. Whilst commenting on the first Green
Paper on reorganisation by Ken Robinson, officials critiqued the composition
of the proposed area health boards on the grounds that they “obscured the role
for effective management.” The Treasury instead proposed that the area board
be formed of full-time managers, under supervision from civil servants.113
Civil servants were well disposed towards instilling greater management
discipline in the health service, and to look to outside expertise in this regard.
As Sir Clifford Jarrett, Permanent Under Secretary of the DHSS, noted on the
rationale for bringing in McKinsey:

It hardly needs to be said that the scope and depth of the review will be unusu-
ally great and that the problems of organising the…management of anything so
large and multifarious as the new NHS are extremely difficult. Indeed, I myself
have never experienced an organisational problem anything like so daunting.
Mainly for this reason, but partly also for presentational reasons, we believe it
would be right to obtain the help of a well-known management consultancy
firm in conducting the review.114
120  A. E. Weiss

Jarrett’s comments are instructive about a “problem… so daunting.”

Consultants had long defined themselves as “problem-solvers,” and it is reveal-
ing that their clients shared this view and echoed their language.115 More
practically, it is notable that Jarrett felt “help” was needed, and that this help
should be external. F.D.K Williams, quoted above, the civil servant in charge
of the Management Study Group which the consultants reported to, on
appraising the work of McKinsey, noted that it “was necessary for the study to
be conducted with assistance from outside the DHSS and NHS.”116 In other
words, the use of consultants, at least presentation-wise, was believed to sig-
nify impartiality—in stark contrast to the Weberian claim that only perma-
nent bureaucracies could claim to be unbiased.117 It is also significant that it
was believed that an external consultancy could actually be “helpful.” An
appraisal by David Owen in 1974, by then Minister of State for the DHSS
(and only the second doctor to hold the position), on the work of the consul-
tants noted that: “the Study had to ‘be expert’ – this implied participation of
people with knowledge of the NHS and its relation to the central department
and also people with general knowledge of solutions to organisational prob-
lems. The consultants fulfilled this latter role. Additionally they had the neces-
sary expertise in programming [in other words, planning the management
and timescales for] the study and communicating the ideas.”118 Owen’s view
that the consultants were “experts” was shared by Williams. In June 1972,
when discussing whether to extend McKinsey’s contract, their perceived value
to the Study Group was made clear. Williams wrote: “If we decide to discon-
tinue the engagement of McKinsey’s (sic.) after the end of July, it seems to me
to follow that the whole Study should be formally wound up (for the Study
Group would be without a feature that makes it ‘expert’).”119
Owen’s political predecessors held McKinsey—and seemingly the value of
consultancy in general—in similarly high regard. During a meeting in May
1971 at 10 Downing Street between Joseph, Ted Heath, the departmental
Permanent Secretary (Philip Rogers), and Cabinet Secretary (William
Armstrong), the use of consultants was explicitly discussed. Whilst addressing
the issue of disappointingly low levels of reductions in staff (and therefore
smaller-than-anticipated cost reductions), Heath was assured that “consul-
tants were being brought in to help” as part of the review of the reorganisa-
tion.120 Significantly, Joseph was at ease in presenting the use of McKinsey by
his department positively to the highest levels in the state. The DHSS had first
hired McKinsey in January 1971 to review its internal operations with antici-
pated manpower reductions. In a personal note to the Prime Minister, Joseph
explained how on his arrival at the department (following the Conservative’s
election victory in 1970): “the Permanent Secretary had already set on foot an
   Reorganising, 1970s: The 1974 National Health Service…  121

examination of the organisation of the Department in the field of Health and

of the Professional Social Services. This has now got into full swing and we
have engaged McKinseys (sic.) in a joint effort with our own staff in a very
thorough examination.”121 The positive affirmation of a “very thorough exam-
ination,” along with the fact that the use of McKinsey was even noted in the
July 27 Cabinet papers, suggests that the use of consultants was at the very
least implicitly supported by the Prime Minister.122 Moreover, it was—and
remains—highly unusual for the work of consultants to be discussed in
Cabinet.
This may be partially explained by the personal preferences of Heath—and
certainly gives credence to Hennessy’s aforementioned claim that Heath was
the “most managerially-minded Prime Minister of modern times.”123 However,
it is also important to recognise the broader connections developing between
the Conservative Party and the American generation of consultancies in this
period. The Conservative-leaning journalist and industrial editor of the
Financial Times Michael Shanks (author of the 1961 book The Stagnant Society
which criticised trade unions for their role in British “decline”) declared the
need for a “Whitehall McKinsey” in a 1970 article in The Times, on the basis
that “the problems of creating and running large organisations…is a field where
the Americans have more experience than us, and consequently do better.”124
The Conservatives had made use of another American consultancy—Booz
Allen Hamilton—whilst in opposition to advise on the role of businessmen in
government and, perhaps entirely coincidentally but nonetheless symboli-
cally, in 1972, the Conservative MP Christopher Tugendhat was awarded the
McKinsey Foundation award for his book The Multinationals.125 Within both
the civil service and political cadres, the value of the American generation
seemed clear. As the DHSS official M.W.  Joyle wrote (coping in Kenneth
Ronald Stowe of the Cabinet Office, and later the DHSS Permanent Secretary
from 1981 to 1987) on the alternative of using civil servants instead of hiring
of McKinsey for the NHS reorganisation: “in any event ‘internal’ support
(and whether it comes from DHSS or CSD seems immaterial for this ­purpose)
would not command public confidence in the same way as would the employ-
ment of consultants…it seems eminently sensible and defensible to use
McKinseys (sic.) and our Secretary of State shares this view.”126
Though McKinsey were the most expensive consultancy by some distance
during this period (see Table 3.1), it was believed by the civil servants who
hired them that they represented a sensible investment.
F.D.K Williams, Under Secretary at the DHSS, reassured John Archer,
Head of the Civil Service Division, when the former proposed hiring
McKinsey, that “we have no doubts about the soundness of the proposed
122  A. E. Weiss

Table 3.1  Management consultancy fees, 1971a

Organisation Level Per diem (£)
Cooper Brothers Director 77
Supervising consultant 65
Deloitte Robson Morrow Partners 95–150
Managers 85–100
Price Waterhouse and Company Partner 87
Senior consultant 60
Peat Marwick Mitchell Partner 93
Manager 70
McLintock Mann and Whinney Murray Partner 90
Senior consultant 70
Binder Hamlyn & Company Partners 120
Managers & associates 56
McKinsey Engagement director 229
Engagement manager 146
TNA: BA 22/660. “Payment of fees to outside consultants.” March 23, 1971
a

programme nor about the quality of the consultants.”127 Williams had been
advised on this basis by another DHSS civil servant, M.W. Joyle, who stated
that “[on] the logic of using McKinsey’s (sic.) [it] seems to us…there is…
intrinsic value of their experiences gained in their recent study of the Irish
Health Service and of hospitals in the USA as well as in our own NHS (in
which they seem to us to have the edge on other leading consultants).”128
It is instructive that Joyle noted McKinsey’s perceived expertise with health
services outside of England. A major factor behind the increased use of for-
eign consultancies in Britain in this period was due to the high value placed
on the “economies of knowledge” (in the terminology of Christopher
McKenna) that consultants give clients in transferring insights from one
geography or industry to another.129 Over the course of the first half of 1970,
McKinsey undertook three studies for the New  York City Health and
Hospitals Corporation: covering the development of the corporation, the pro-
vision of abortion services to the poor, and consolidating administrative
­functions in the corporation.130 As part of the work, McKinsey developed a
detailed understanding of healthcare services across the United States, estab-
lishing the income and costs of such services, the “socioeconomic profiles” of
the “people [the hospitals] served,” and the utilisation and occupancy rates of
such services. It was this study which M.W. Joyle was explicitly referring to
when discussing the company’s procurement for the NHS reorganisation.
And so whilst the use of American consultancies in this period did promote
some concern about “not buying British,” politicians at the highest level did
not feel this justified sacrificing quality for nationalism. By 1975 McKinsey
had 21 offices across Europe, North America, and Asia, and so it is unsurpris-
   Reorganising, 1970s: The 1974 National Health Service…  123

ing that they would be viewed as possessing these international “economies of

knowledge.”131 It is clear that McKinsey’s work with international health ser-
vices was believed to be of major benefit, rather than any hindrance, to their
work on the NHS reorganisation plans.132
Indeed, the DHSS’ decision to use McKinsey for their international experi-
ence followed the lead of the Department of Trade and Industry (later the
Department of Industry continued this trend), who had looked to outside
expertise in the form of American consultancy firms to provide strategic advice
on the prospects of the nationalised industries. In 1971 McKinsey were asked
by the Department of Trade and Industry for a report on the British Steel
Corporation and in 1973 Booz Allen Hamilton’s report on the UK shipbuild-
ing industry for the department was published. In 1975 the Department of
Industry, now under Tony Benn—a huge proponent of consultants who first
hired McKinsey for a review of the Post Office in 1965—commissioned the
BCG to produce a report on the future of the British motorcycle industry; and
in the same year, McKinsey produced a joint study with the Central Policy
Review Staff for the unit on the future of the British motor car industry.133
Though British firms also tendered for the work (PA Management Consultants
conducted similar studies on the ship repairing industry and the UK carpet
industry for the Department of Industry in 1973), American firms were usu-
ally favoured.134 Antony Graham, a consultant at P-E Consulting Group,
recalled in 2011 that his firm’s chairman David Nicholson—a pioneer of man-
agement consultancy in the shipbuilding industry—was furious that P-E did
not win the Booz Allen Hamilton assignment.135
M.W. Joyle was consequently not alone in expressing a clear respect and
appreciation for external expertise. When tying together the terms of refer-
ence for the MSG, it became apparent that delineating responsibilities
between the Brunel University Group and McKinsey was “reaching an
impasse.” Though this was eventually resolved, both Richard Meyjes (a
­marketing expert, formerly of Shell, and Head of Heath’s Businessmen’s Team,
who also sat on the Steering Committee for the MSG) and Sir Philip Rogers,
the DHSS Permanent Secretary, “in the last resort preferred to rely on
McKinseys (sic.) alone,” should the need arise. Seemingly the prospect of
working with McKinsey proved more enticing than working with Elliott
Jacques—a Canadian organisational psychologist—Brunel Health Services
Organisation Research Unit (HSORU) (which was largely funded by the
DHSS).136 This is likely to have been for two reasons. First, since the HSORU
was funded by the DHSS its involvement could have lacked the impartiality
that McKinsey could provide. And second, McKinsey quite simply had the
124  A. E. Weiss

greater reputation for organisational reform, having already worked with

major national and international organisations.
Civil service enthusiasm for McKinsey may also have been borne out of the
potential for career development that working alongside consultants offered.
Writing jointly in the Management Services in Government magazine following
the reorganisation, Robert Maxwell, a consultant at McKinsey (who also had
been heavily name-checked in McKinsey’s proposal for the review owing to
his experiences of health systems in New York, Ireland, Holland, Italy, and at
the United Oxford Hospitals), and R.S.  Matthews (Under Secretary at the
DHSS) glowingly noted the benefits of “partnership working” between
consultants and civil servants (such as gaining the benefits of “external
independence and objectivity” whilst avoiding the “anxiety” of employing
“outsiders”).137 Bearing in mind the relatively poor career prospects outside
Whitehall for civil servants at the time, the notion of working with external
agents may well have been appealing.138
In terms of career prospects within Whitehall, civil servants were also
incentivised to work constructively with consultants. The 1968 Fulton Report
changed the promotion procedure for all ranks up to Under Secretary. As a
consequence all departmental permanent secretaries would be assisted during
promotion considerations by a small “paper board” committee consisting of a
representative of the CSD.139 Given that the permanent secretary of the
department was ultimately accountable for all consultancy assignments, and
that the CSD actively encouraged the use of consultancies and acted as the
broker for departments in facilitating their usage, it was prudent for civil ser-
vants to be seen to be working harmoniously with consultants. It is with this
in mind that one can best interpret how R.S. Matthews described his working
relationship with McKinsey & Company: “ultimate responsibility for techni-
cal leadership [of the study rested] with the management consultants…and all
members of the team loyally accepted this position.”140
Partnerships between consultants and civil servants also developed in the
boundaries between the professional and the social. During the MSG’s work,
Sir Philip Rogers, the DHSS Permanent Secretary, gave a speech at a presti-
gious McKinsey dinner for its consultants. And on receiving the Knight of the
Grand Cross (GCB), Rogers received a special note from Henry Strage, the
McKinsey Partner-in-Charge of the study, effusively congratulating his friend,
the “man for all organisations.” Strage wrote that “I have been privileged to
work with many outstanding and distinguished people [and] I can honestly
say that the brief period during which we worked together was a highlight of
my professional career in England” and noted that he looked forward to
working with Rogers again.141 Rogers, with an expertise in management and
   Reorganising, 1970s: The 1974 National Health Service…  125

personnel development, had spent the two years before his promotion to the
DHSS implementing the Fulton Report’s recommendations whilst at the
CSD.142 These recommendations called for a more professionalised approach
to management in the civil service and, as discussed earlier, actively encour-
aged the transfer of private sector skills into the service via the use of manage-
ment consultancy firms. It is therefore highly likely that Rogers felt at ease
working with McKinsey & Company, and in particular Strage, who, though
American (having studied engineering at Worcester Polytechnic Institute
before gaining an MBA at Columbia University), had been working for
McKinsey in London since 1962. Clearly, strong bonds were formed, through
either career-beneficial or socially beneficial networks between consultants
and state agents.

A Depoliticised National Health Service

There were certain aspects of the possible solution to the problem which had
been predetermined and preagreed by both [political] parties before we started.143
(Henry Strage, McKinsey & Company, 1987)

Since its conception, political parties have frequently asserted that the NHS
“cannot be trusted” with their opponents.144 Popular historiography has also
dichotomised the NHS by political parties.145 However, in two respects, this
portrayal of the NHS being the minefield of politicians is erroneous. As
Strage’s comment alludes to, it is in fact more “political” than high politics
alone. As Klein’s earlier comment highlighted, the 1974 reorganisation was
the product of much broader trends than politics. Since the 1962 Porritt
Report, which called for unification of the health services, reorganisation had
been on the agenda of numerous interested parties.146 What is most revealing
about the nature of the reforms is that despite so many iterations, the general
principle of unification of the health service remained consistent through-
out.147 Whilst there were disputes regarding the degree of local authority rep-
resentation on area health boards, there appeared to be no markedly
party-political emphasis to these.
In fact, the only clearly “political” contribution to the reorganisation
debates is cited to be the Conservatives’ in general, and Keith Joseph’s in par-
ticular, focus on “managerial efficiency,” to the extent that the term “manage-
ment” was used 30 times in Joseph’s 1971 Consultative Document. The
document itself became sarcastically famed for its “jargon-ridden” ambition
that “throughout the new administrative structure there should be a clear defi-
126  A. E. Weiss

nition and allocation of responsibilities, that there should be maximum dele-

gation downwards matched by accountability upwards, and that a sound
management structure should be created at all levels [emphasis added].”148
Whilst it is true that only a few months after taking office Joseph recom-
mended, whilst musing on the NHS reorganisation, that “ought we, urgently,
to call in management advice?,” this should not be confused with a uniquely
Conservative focus on management efficiency in the era.149 Two years prior,
Roy Jenkins, the Labour Chancellor of the Exchequer, had chastised his col-
league Kenneth Robinson for failing to give “greater priority to improvement
of management” in his NHS Reorganisation Draft Green Paper.150 And whilst
between 1971 and 1973 Keith Joseph approved £250,000 to be spent on the
services of McKinsey, in just 1969—when in opposition—he had criticised
the Board of Trade’s “beloved use of management consultancy.” As we have
seen, it was in fact a Labour politician—Anthony Wedgewood Benn—who
first sanctioned the use of McKinsey for a major state body.151
The very nature of the political cycle inevitably means that drawn-out
reforms are likely to pass through various parties. As seen, the reorganisation
plans were disrupted by elections and passed from Labour to Conservative
back to Labour. David Owen (who was Minister of State for Health when the
Reorganisation Act was finally implemented in April 1974) reflected that he
and Barbara Castle (then Secretary of State at the DHSS) “actually considered
halting the whole reorganisation but concluded…that we had no alternative
but to implement legislation we had, in important respects, opposed in the
House of Commons… [because]…the health service was hard enough to run
without attempting to reverse the reorganisation.”152 Clearly, Owen felt pow-
erless to stop a reform he had not started but would have to implement. Even
though Owen believed his and Castle’s decision was “wise…in retrospect,” the
“traumatic experience” left him and “many others deeply sceptical of further
wholesale administrative reform of the NHS.”153
Politicians were therefore only one of a number of interested parties who
held influence over the NHS. The Royal Colleges, think-tanks, and the BMA
were others—taking us back to the concept of a “governmental sphere,” where
parties interested in the governing of organisations would discuss and debate
means and methods. The development of Richard Crossman’s second Green
Paper over the course of 1970 was highly multidisciplinary. As Brian Abel-­
Smith’s (an influential health adviser to the Labour Party) biographer, Sally
Sheard, notes, Abel-Smith regularly held dinners at his terraced house on
Elizabeth Street in Belgravia which “played a key role in the development
of…the NHS reorganisation Green Paper.” Invitees to these dinner-based dis-
   Reorganising, 1970s: The 1974 National Health Service…  127

cussions included Crossman, Baroness Serota (Minister for Health), Jerry

Morris (Professor of Public Health at the London School of Hygiene and
Tropical Medicine), John Revans (Senior Administrative Medical Officer for
Wessex Regional Health Board), and Jim Sharpe (Assistant Commissioner to
the Redcliffe-Maud Commission).154 Yet again, here is another clear example
of the “governmental sphere” in action.
Consequently, it would appear that politicians were little more than equal
voices amongst these parties. For example, Keith Joseph always favoured a
chief executive to be in charge of the regional tiers. Joseph sought support in
this proposal from the CSD, writing to the department that “unless there was
one person with ultimate responsibilities, there was unlikely to be enough
drive and purpose injected into the organisation.”155 Richard Meyjes also sup-
ported the concept, although in the face of opposition from senior health
officials, Joseph was persuaded to refer the proposal to the MSG’s enquiries.156
When the MSG considered the issue, the team from Brunel, headed by Elliot
Jacques, worked with Meyjes to build the case for chief executives. However,
even though Joseph remained convinced of the value of the proposal, in the
face of growing hostility from the DHSS, Joseph rejected the recommenda-
tion for chief executives. Embarrassed and humiliated, Meyjes resigned from
both the MSG and from his role in Heath’s administration.157 Thus, even
when politicians felt strongly about particular changes, it is hard to see the
NHS as being firmly within their gift of influence. All changes were ulti-
mately a compromise between interested parties. The most politicians could
do was guide the winds of change, imparting as much influence as circum-
stances permitted.

The Mirage of Consultant Power

The consultants took responsibility for devising and controlling the study pro-
gramme…their strong points were a methodical approach and effective time-­
taking.158 (David Owen, Minister for DHSS, January 30, 1974)

As David Owen’s quote demonstrates, as in the study for the management

arrangements of the Irish Health Service which McKinsey also conducted, the
company was specifically not requested to give advice on the geographical
span or organisational structure of the regional health boards, AHAs, or dis-
trict management teams in the reorganised NHS.159 In England and Wales
the organisational structure had already been predetermined in the 1971
Consultative Document (which McKinsey played no part in), which in turn
128  A. E. Weiss

had been greatly influenced by the findings of the Seebohm proposals on local
government, which in effect decided the number and geography of the
AHAs.160 Significantly, McKinsey had already become known for high-profile
studies on organisational reform both internationally and domestically, and
indeed even for public sector bodies such as the British Railways Board in
1968.161 However, these changes were outside of their remit in this instance;
as Webster described, the 1971 Consultative Document had already “pre-­
determined the management framework” of the NHS.162 Whilst it is correct
to state the recommendations from the MSG (published in what became
known as the “Grey Book”) were accepted almost in entirety by the govern-
ment in February 1973, this should not give the impression of consultant
power.163 The sole lasting influence of the “Grey Book” was its emphasis on
“consensus management”—that “no particular profession should be seen to
be in a dominant position on any management team”—in the District
Management Teams, which were to manage and co-ordinate health service
delivery in the future structure.164
The McKinsey and Brunel teams supported a Study Group of 16 (exclud-
ing the consultants) which was headed by F.D.K.  Williams of the DHSS,
three non-DHSS members and six DHSS civil servants, and six members
from the full Management Study Steering Committee. The Steering
Committee itself was composed of the Chair, Sir Philip Rogers, 22 non-­
DHSS members, and 17 DHSS members.165 Such was the seniority and
numerical superiority of the non-consultant contingent that anything
controversial—such as the proposal of chief executives in the regional tiers—
could easily be outvoted (as the chief executive plan was).
Despite the hefty fees involved—McKinsey were paid a total of £143,760
for their work, which used eight consultants over 19  weeks—the relatively
low influence of the consultants on the study was recognised by all parties.166
On reporting back to the CSD on McKinsey’s work, David Owen accepted
that “ideally their study should have been undertaken at an earlier stage
[before most decisions were taken]” and that, perhaps as a consequence, “with
two exceptions the consultants’ work tended to be superficial.”167
F.D.K.  Williams was somewhat more generous in claiming that the “the
results [of the MSG] were as good as could be expected and this was to a large
extent due to McKinsey’s successful collaboration with the Brunel Health
Services Research Unit.” Nevertheless, Williams concurred with Owen that
“if political convictions [had not interfered] the study ought to have been
mounted at an earlier stage.”168 Henry Strage, likely mindful of the high-­
profile impact McKinsey had already had on a number of British organisa-
tions as we have seen earlier, felt the study had not worked out as intended:
   Reorganising, 1970s: The 1974 National Health Service…  129

The study I have to say in retrospect was a disappointment …. We worked to a

steering committee of some 60 interested people who came together once a
month for a whole day, or maybe it was once a fortnight. It was quite clear that
there were lots of vested interests and in talking to a lot of the politicians at the
time, including the Prime Minister, it became clear that there were certain “no
go” or “no no” areas. I really was in retrospect I think probably naïve in thinking
that we could have made as big an impact as I thought we might have. So what
we were able to do is I think give the whole system a jolly good shake-up, but
there were certain aspects of the possible solution to the problem which had
been predetermined and preagreed by both parties before we started. I remem-
ber going to see Crossman, who was the Labour Minister of Health, in his
office, which was a very interesting meeting because he kind of leaned back in
his chair and for about three hours explained to us how the British government
really worked, and how it seemed to work. I would say honestly that probably
we did 30 percent of what we could have done. But we were trying to work in
an area where at a certain point objectivity ceases.169

As explored later, McKinsey had a very different recommendation for the

challenges facing the NHS, yet it was not within their remit to enact these. The
BCG encountered similar challenges during their review of the British motor-
cycle industry in 1975. BCG’s knowledge of the Japanese market (a knowledge
which British consultancy firms did not possess) was crucial in their selection
for the report. The study was commissioned against a backdrop of Britain’s
declining share of North American motorcycle exports. Whereas in 1968
Britain claimed 70 per cent of the North American market and the Japanese
none, by 1974 the Japanese had spectacularly taken 70 per cent of the market,
with the British down to a mere 10 per cent.170 The report, which one BCG
consultant at the time believed highlighted the “sheer desperation of British
industry [in comparison to Japan],” proved a shocking indictment of British
management for those who read it.171 As Barbara Castle recalled in her diary:
“I had got quite stirred up as I waded through the 18 page summary of the
consultants’ report…the picture of British management is so appalling.”172
Gerald Kaufman, Minister of State in the Department of Industry from
1975 to 1979, welcomed such consultancy studies. As he opined, you “needed
to have an outside view from people with no vested interests, no political divi-
dend. Consultants were a challenge to political ideology.”173 Kaufman’s com-
ment is instructive. Not only did he clearly believe that consultants were
politically independent, he also stressed that consultants provided a “view”—
not recommendations.174 As explained in the Commons when Booz Allen
Hamilton were commissioned for the 1973 shipbuilding study: “The consul-
tants’ terms of reference excluded them from making recommendations on
130  A. E. Weiss

policy, though in the final part of the report they describe five hypothetical
situations resulting from different courses of action. The Government are not
in any way committed to any of these courses, nor do they at this stage accept
any of the financial or employment implications drawn by the consultants.”175
Similarly, BCG were specifically requested not to make recommendations to
the government on the British motorcycle industry, only to comment on par-
ticular “strategy alternatives.”176 Consequently, it seems impossible to view
management consultancy in this period as anything other than a tool of gov-
ernment, rather than a “shadow government” as some commentators have
claimed.177 Indeed, there is an important counterfactual here that must be
considered. Perhaps in a bid to discredit the increasingly troublesome Tony
Benn (the British motorcycle industry was heavily reliant on one of his co-­
operatives, Meriden Motorcycles), or perhaps as a result of tightened govern-
ment purse strings post-OPEC I, the Wilson government decided against
supporting the British motorcycle industry further.178 However, as the consul-
tant in charge of the BCG Report emphatically stressed, had BCG been asked
to make recommendations they would have encouraged financial support,
most probably consolidating British efforts in a high-specification Norton
Commando motorcycle.179 Had the consultants actually held power, the
future of British motorcycle industry may have looked very different.
In 1976, when McKinsey Director John Banham expressed to The Times
his views on the NHS reorganisation he suggested that there was “at least one
management tier too many” and, more generally, that the longer-term solu-
tion for the NHS should be a “properly funded Social Insurance Scheme.”180
Two years later, John Banham was invited to give evidence to a Royal
Commission on the NHS. Reflecting further on McKinsey’s support, Banham
restated that it would have been better to have fewer management layers and
to “test the reorganised management structure in one region before adopting
the plans nationally.”181 However, this was well beyond the terms of reference
for which McKinsey were commissioned to work on during the reorganisa-
tion, and so their views on this were largely moot.
The caricature of consultants and clients is typically that of puppet-master
to puppet; plunderer to plundered; thief to fool.182 The 1974 reorganisation
case study and experiences of the BCG, however, suggest that a reversal of
roles in the aforementioned descriptions may be more apt. In practice,
McKinsey—and the team from the work study unit from Brunel University—
were the puppets of the politicians and civil servants. Their narrow terms of
remit had already been set in the 1971 Consultative Document, and the MSG
Steering Committee neutered their recommendations. Thus, on the whole,
during the reorganisation McKinsey were very expensive puppets, which
   Reorganising, 1970s: The 1974 National Health Service…  131

Charles Webster appropriately identified as being merely “in reality employed

to make some kind of coherent pattern out of the tangled web of existing
policy decisions and apply a patina of management respectability to the docu-
mentation associated with reorganisation.”183

A Disunited Kingdom

“Britain” doesn’t mean anything in terms of the National Health Service.184

(David Owen, 2013)

Histories of the NHS have tended to focus on the concept of a “British”

health service, though recent work by John Stewart and John Welshman has
gone some way to highlighting this inadequacy.185 As Owen’s above comment
suggests, the 1974 reorganisation is a case in point as to why this view does
not do justice to the realities of the NHS, or indeed the “British state.” Each
jurisdiction reorganised in different ways and at different times. Northern
Ireland did so only in terms of management arrangements in 1973. England,
Scotland, and Wales reorganised more structurally in 1974, with the Scottish
changes having a far lesser focus on management arrangement and proving
relatively uncontentious. In Scotland, this was largely because local govern-
ment representation was not as pressing a political issue as in England or
Wales. Scotland did not adopt the principle of “consensus management” in
district teams which England did. In Wales and Scotland there were no
regional tiers.186 In Northern Ireland, since 1948 health services were already
more closely integrated with local government services than in England, so
the driving principle of unification was far less radical than in England.187
With regard to consultancy, even here arrangements differed. Whilst Wales
had a very similar study to England (known as the “Red Book” and also con-
ducted by McKinsey), there was no report into Scotland’s management
arrangements, and Northern Ireland’s report was undertaken by a different
consultancy firm, Booz Allen Hamilton, in 1972.188
Despite their differing paths, the impact of these consultancies on the four
jurisdictions of the United Kingdom fostered a more unified concept of the
state in terms of how they managed their health services. Like in England, in
Wales McKinsey were not commissioned to report on the structure of the
health service, rather just its “management arrangements.” As a result, though
Wales, owing to its size (then a population of 2.7 million), did not develop
RHAs, it did develop AHAs, and significantly, Health District Teams, the lat-
ter of which had the same roles, responsibilities and accountabilities ascribed
132  A. E. Weiss

to them in Wales as the District Management Teams in England.189 Most

intriguingly, even in Northern Ireland, where Booz Allen Hamilton (not
McKinsey) were commissioned to report on the “corporate principles” for
operation of the health service (whose broad structure had already been con-
firmed to remain as previously in the 1971 Consultative Document), “District
Units” were proposed by the consultancy to “manage and deliver services” in
an almost identical fashion to the responsibilities McKinsey had outlined in
England and Wales.190
The close alignment of management disciplines recommended by consul-
tancies in England, Wales, and Northern Ireland was even more pronounced
when Scotland is considered. Since no management report was made in
Scotland and no consultants used, it seems highly plausible that, as the histo-
rian John Stewart writes, the reason for the “weaker acceptance of managerial-
ism in Scotland in the NHS in the 1980s [than in the rest of the United
Kingdom]” can in part be attributed to the lack of change in the jurisdiction’s
management operations in the 1970s, in which consultants were key in other
parts of the United Kingdom.191
It is here that our earlier explanatory frameworks for the “state” and “state
power” are instructive. First, the fact that there was no “British” reorganisa-
tion of the NHS—experiences were different across territories—indicates that
if we believe (using Mann’s thesis) that what constitutes a “state” is its central-
ised power over a given territory, then we cannot speak of a coherent “British
state” with regard to the reorganisation; potentially an English and Welsh one,
but certainly not one which includes Scotland and Northern Ireland. On this
definition, there can be no “British state” if the geographic jurisdictions which
it constitutes were all reorganised in different ways. And second, our frame-
work for “state power” helps to show what impact consultants had on the
state. McKinsey’s and Booz Allen Hamilton’s influence is most apparent in
changing the administrative power, that is, the structure and organisation of
the NHS in England, Wales, and Northern Ireland. Indeed, the two consul-
tancies changed this power in remarkably similar ways. However it was only
this typology of “state power” that consultants had an impact on. Legal, fiscal,
functional, and coercive powers were not affected in any material way by the
consultants.
Consequently, both the operational experiences and the experiences of
using consultancy firms in each of the UK jurisdictions highlights the need
for the rehabilitation of the Pocockian emphasis on “three kingdoms” with
regard to twentieth-century Britain.192 It is clearly unhelpful and overly sim-
plifying to speak of a coherent “British” NHS. Given the significant propor-
tion the NHS constitutes of state expenditure, this challenges the concept of
   Reorganising, 1970s: The 1974 National Health Service…  133

a unified British state, and instead suggests the need for a more nuanced and
geographically differentiated approach to state theory. When this is adopted,
it becomes apparent that whilst the jurisdictions share common traits in terms
of healthcare—population-based and financed nationally—they have differ-
ing histories and legal frameworks for reform.193 In this instance, however, the
development of new “management arrangements” and ways of working in the
health service—which in part were disseminated by consultancies—actually
helped to create a more uniform approach to managing the health service
across England, Wales, and Northern Ireland (notably, excepting Scotland),
and as a consequence a more standardised method of state management across
geographies. As explored later, this was largely the case in Britain, up until
devolution in the late 1990s.194 In short, the jurisdictions reorganised at dif-
ferent times and for different reasons, and so we cannot speak of a “British
NHS reorganisation”; however, the dominant management theories of the
time meant that England, Wales and Northern Ireland actually reorganised in
a similar fashion. This highlights how, despite being unintentional, manage-
ment arrangements can serve as means of unifying different geographies.

 ath Dependency, Consultancy, and the National

P
Health Service

I am sure that if we discontinued the assignment at the end of July we should

not yet have got optimum value out of our investment.195 (F.D.K.  Williams,
Permanent Under Secretary DHSS, 1972)

Between 2006 and 2010 the Department of Health spent £30 million on
the services of McKinsey & Company, though their perceived impact and
influence is commonly cited as being greater than the sum of the monies
spent.196 A compelling thesis for the growth of the use of consultancy firms
since the 1960s has been the emergence of “path dependency”; essentially,
that the use of consultancy services largely begets further use.197 This case
study supports this thesis in two ways. First, one of the prime motivations for
hiring McKinsey for the MSG work was that they were already supporting the
DHSS in a £110,000 contract to review the department’s organisational
headquarters. As M.W. Joyle wrote on the issue: “the management structure
of the NHS must be complementary to that of the Department and this can
most easily be achieved if the same consultants are working with us on
both.”198 Second, whilst the MSG review was provisionally due to last
18 months during three six-month phases, civil servants within the DHSS
134  A. E. Weiss

and CSD were keen to remove McKinsey’s services early on the basis that they
represented “very poor value for money.” Whilst this book goes some way to
correcting claims that the civil service has been strongly opposed to external
advice, this correction should not be overplayed. Indeed, some civil servants
felt that “there is no view in the Department that McKinseys [sic.] have any
great contribution to make that we cannot make ourselves.”199 However,
F.D.K. Williams, quoted above, responded to the civil servants by acknowl-
edging the value in not continuing the assignment any longer than necessary
but also stating that: “I am sure that if we discontinued the assignment at the
end of July we should not yet have got optimum value out of our investment”
and “McKinsey’s [sic.] could play a necessary part…in the intensive commu-
nications and training programme [associated with roll-out of the reorganisa-
tion changes].”200 Williams was backed up by another official, J.P.  Dodds,
who also expressed a desire not to extend McKinsey’s stay longer than required,
but noted that there was no other resource in the department to carry out
their work.201 In essence, McKinsey remained due to the problems of transac-
tion costs—a classic hallmark of path dependency. Had the DHSS replaced
McKinsey with another consultancy or had to train up individuals in-house
this would have taken up civil service resource; this was deemed to be an infe-
rior option than continuing the use of consultants.
In addition, on agreeing the contracts for the study, McKinsey were obliged
to sign the Official Secrets Act (OSA) and sign a non-press disclosure agree-
ment.202 This is intriguing, and plays into the thesis of the historian David
Vincent, that from the Victorian era onwards Britain developed a “culture of
secrecy.” This culture developed both informally (in Vincent’s description, in
English society gentlemen “do not reveal our own secrets nor those of others”)
and formally (for Vincent, the OSA involved the elites of the British state in
“secret relationships [which] are bound together by the sharing of secrets”).203
By signing the OSA, McKinsey effectively became partner agents of the state,
forming a hybrid of public and private sector working; and this in turn
increased the transaction costs involved in finding different consultants.
One of the ironies of the 1974 reorganisation is that whilst it created a
specific dependence on McKinsey’s consulting services it also created a boom
in managerial numbers within the NHS. In theory this increase in internal
managers could have supplanted the need for external consultancy services.
Between 1968 and 1979 there was a tripling of administrative and clerical
staff in the health service—a direct result of the 1974 reforms.204
On the one hand, the increased dependence on consultancy led to what the
management theorist Michael Porter would describe as a loss of “core compe-
tencies” in the NHS, particularly in the field of management organisational
   Reorganising, 1970s: The 1974 National Health Service…  135

expertise.205 For example, when the Merrison Royal Commission met in 1977
to discuss the NHS’ organisational structure, McKinsey were called in as sub-
ject matter experts, despite themselves criticising their work during the
hearing.206 Yet on the other hand, the very reforms McKinsey helped enact led
to many more managerial staff in the NHS. The reason why additional num-
bers of managers did not lead to diminution in management consultancy
usage, but instead the reverse, plays to the heart of what consulting is: it is
external (and often perceived to be objective) advice. Thus no matter how
great the numbers of internal staff, the demand for an external perspective
remained, and one could argue that in the case of the NHS, the increased
numbers of managerial staff may even have led to an increase in potential
purchasers (and thereby demand) for consultancy services.
Whilst McKinsey’s work was largely derided in the press as “ghastly,”
“impenetrable,” and “jargon,” the impact of the assignment on the firm’s rep-
utation was undoubtedly positive.207 Henry Strage recalled that one of the
outputs of the work was:

[That] we produced a lot of facts [and] one of the byproducts of that was prob-
ably one of the first best sellers that McKinsey produced – not quite as popular
as “In Search of Excellence.” [An international bestselling book on the cultural
traits of leading corporate organisations.] But we had to collect some compara-
tive data, and we had to do some pretty basic juggling around with national data
comparing the health service here with around the world. When we put it all
together somebody said, “Why don’t we put it into a book?” which we did, a
pamphlet really of about 100 pages… Eventually it got sort of passed around
and, to my surprise, one day shortly after we published it we got a request from
some university for 200 copies … we hadn’t realized that up until that time even
the World Health Organization, which produced a lot of statistics, had never
bothered to put them together in a meaningful manner. So our book on health
care became, if not a best seller, certainly a very popular book in health courses
all around the world.208

In fact, the book, written by Robert Maxwell, one of the McKinsey consul-
tants on the MSG study, was even discussed in the House of Commons as a
“remarkable and important document, worthy perhaps of a debate on its
own,” by the Conservative MP Edward du Cann.209 McKinsey’s reputation, as
it had been through the Bank of England study, was undoubtedly enhanced
by the high-profile nature of its work, in spite of their lack of influence. An
additional by-product of McKinsey’s knowledge development work, such as
Maxwell’s book, was to help position consultancy as an extra voice in the
knowledge industry, alongside organisations such as the King’s Fund, to the
136  A. E. Weiss

extent that the driving agenda of the NHS from 2010 to 2015 to save £20
billion in “efficiency savings” was directly supplied by a report from McKinsey
& Company for the Department of Health.210

Legacy

Does the enigmatic McKinsey and Company have undue influence over UK
health policymakers?211 (Peter Davies, The BMJ, 2012)

At the start of this case study, five questions were posed regarding what this
case study illuminates about the relationship between management consul-
tancy and the state. First, it is apparent that consultants were hired by the
DHSS for three reasons: to give advice on a subject they were deemed to pos-
sess expertise in (management efficiency); to give a perception of objectivity
and external review to the study; and because the civil service was largely
actively willing to work with outside agents. This NHS reorganisation history
also demonstrates the extent of the power networks shared by both civil ser-
vants and external consultants and their mutual interest in the vogue concept
of management efficiency.
Second, the 1974 reorganisation highlights the extent of broad cross-party
consensus involved in major state reform. This is significant not only in terms
how political administrations reform the state—noting that it was the first
Wilson government which tackled the idea of reorganisation with intent, the
Heath government which created the blueprint, and the second Wilson
­government which actually implemented this political hybrid of a plan—but
also in terms of how political parties viewed external advice (both the
Conservatives and Labour sanctioned the use of McKinsey’s services) and
both shared a belief in the power of management to improve public services.
Whilst debates between Labour and the Conservatives on the NHS were real
and positions distinct, the majority of the pressures for reform were extra-
political: impending local government reform and a growing cultural empha-
sis on managerialism fused to create a pressure for change which political
parties were only partial agents in. This helps to highlight how major state
reform is driven by factors greater than politics alone.
Third, the reorganisation is an exemplar of how state power lies predomi-
nantly in the permanent bureaucracy. The Steering Committee which gov-
erned the MSG was dominated by civil service interests, and when a
contentious topic—such as management of the NHS by chief executive—was
proposed and even supported by an elected politician, it was relatively easy for
   Reorganising, 1970s: The 1974 National Health Service…  137

the civil service to dismiss this. As this case study has demonstrated, in reality
the management consultants had few issues of material importance to con-
sider, and extremely little scope for influence—a point acknowledged by the
civil servants, politicians and consultants working on the study. When consid-
ering our typologies of state power, it is apparent that consultants only directly
influenced the administrative power of the state, and even then their impact
was relatively weak. In practice, therefore, the consultants were merely tools
of their civil service masters, and in this particular instance, one could plausi-
bly claim a reversal in the power dynamics of Kieser’s aforementioned allegory
of puppets and puppet-master.
Fourth, the experiences of the four different jurisdictions of the United
Kingdom imply it is time for a more sophisticated and geographically nuanced
approach to the “British state.” By analysing “Britishness” through the lens of
this case study, it is apparent that not only did Scotland and Northern Ireland
chart different courses from England and Wales in terms of the practical
implementation of the NHS reform, the jurisdictions also exhibited different
attitudes to management efficiency. Notably—excepting Scotland—Northern
Ireland, Wales, and England each had their own separate consultancy reports
on management arrangements for their geographical healthcare needs during
this period, by differing consultancy firms. However, despite these differences,
management changes helped to bring the jurisdictions closer together. Where
consultancy firms were used, their recommendations helped to foster a stan-
dardised approach to managing the health service, and in turn create a more
standardised approach to state management.
And finally, the lasting impact on the state of the reorganisation was two-
fold. There was an increased emphasis on management in the health service.
This was both numerically, in terms of administrative and clerical staff (as
greater numbers of individuals were needed to staff the new management
tiers), and also philosophically, in terms of an approach to management based
around “consensus” between professional groups. There was also an increased
acceptance that consultants were legitimate sources of managerial expertise
and contributors to the knowledge industry which helped inform debates
regarding what the NHS is, and how it should be. However the use of
McKinsey also meant an external consultancy became expert in attempts to
reform the state, not the state itself. Thus when future reviews on the subject
were undertaken, consultants were relied upon. Critiques of this reliance
grew, as Peter Davies’ above quote demonstrates. As reforms grew in number
and frequency, so too did the frequency of the use of consultancy firms. This,
as explored later, over time, led to the development of a state where the bound-
aries and roles of public and private sector agents became increasingly blurred,
especially with regard to the administrative powers of the state.
138  A. E. Weiss

Notes
1. McKinsey & Company archive, oral history interviews (hereafter McK):
Henry Strage, May 20, 1987. See Appendix 1 for biography.
2. Webster, The Health Services since the War, Volume II, 778–79.
3. Steven Jonas and David Banta, “The 1974 Reorganization of the British
National Health Service: An Analysis”, Journal of Community Health 1, no.
2 (Winter 1975): 91–105.
4. Webster, The Health Services since the War, Volume II, 464.
5. The major—and largely unchallenged—interpretation of the reorganisation
is ibid.
6. Nigel Lawson, The View from No. 11: Memoirs of a Tory Radical (London:
Bantam, 1992), 613; Webster, The Health Services since the War, Volume II,
801.
7. See Introduction for more on definitions regarding states and state power.
8. For instance, in Rudolf Klein’s The New Politics of the N.H.S., Harlow, 4th
edn., 2001, p. ix, he apologetically writes that a “little Englander approach”
has been adopted in his analysis. However, this blind-spot has been correctly
noted by John Stewart, “The National Health Service in Scotland: 1947–
1974: Scottish or British?”, Historical Research 76, no.193, 2003, 389–420,
David J. Hunter in “Organising for Health: The National Health Service in
the United Kingdom”, Journal of Public Policy 2, no. 3, August 1982, 263–
300, and H. Welsham, “Inequalities, Regions and Hospitals: The Resource
Allocation Working Party”, in Sally Sheard and Martin Gorsky (eds.),
Financial Medicine: The British Experience since 1750, London: Routledge,
2007, 221–241.
9. Barry Hedley, interview with author at Gonville and Caius College,
University of Cambridge, March 18, 2011. See Appendix 1 for biography.
10. Marvin Bower, Perspective on McKinsey (McKinsey & Company internal
publication, 1979), 92.
11. McKinsey & Company minutes, “Minutes of Planning Committee
Meeting”, 5–6 April 1956, 7. Quoted in McKenna, The World’s Newest
Profession, 172.
12. Bower, Perspective, 93–94.
13. McKinsey earnings quoted in “They cried all the way to the Bank,” The Sunday
Times, 1968, exact date unknown, found in TNA: T326/1040; MCA reve-
nues calculated by author from MCA annual returns, MCA: box 22.
14. “Quality Control for the Management Consultants,” Financial Times, July
18, 1966, 10.
15. Stephen Aris, “Super managers,” The Sunday Times, September 1, 1968.
16. McKenna, The World’s Newest Profession, 17–37.
17. Quoted in Tisdall, Agents of Change, 51; see Chap. 1.
   Reorganising, 1970s: The 1974 National Health Service…  139

18. Bower, Perspective, 95.

19. David Giachardi, telephone interview with author, March 9, 2011. See
Appendix 1 for biography; Bernard Doyle, telephone interview with author,
February 16, 2011. Doyle, however, had studied at the University of
Manchester (BSc Hons) and been educated at St Bede’s College, prior to his
time at Harvard.
20. Calculated by author from MCA: box 23.
21. For more on the differing interpretations of “strategy” in the 1960s, see
Lawrence Freedman, Strategy: A History (Oxford: Oxford University Press,
2013), 499.
22. H. Igor Ansoff, Corporate Strategy. An Analytic Approach to Business Policy for
Growth and Expansion (New York: McGraw-Hill Book Co., 1965).
23. Financial Times, July 18, 1966.
24. TNA: BA1/70. Mary Loughanne, initial Secretary to the Fulton Committee,
“Note for the record.” Michael Simons. April 18, 1966.
25. The Sunday Times, March 1, 1964, 15–16.
26. Ibid.
27. “Letters to the editor,” from C.W.  Bocock of Associated Industrial
Consultants Ltd., The Sunday Times, March 8, 1964.
28. For more on the “American miracle” see Leslie Hannah, “The American
Miracle, 1875–1950, and After: A View in the European Mirror”, Business
and Economic History 2, no. 2 (1995): 197–220.
29. Jim Tomlinson, The Politics of Decline, 18; Nick Tiratsoo, “Limits of
Americanisation: The United States Productivity Gospel in Britain”, in
Becky Conekin, Frank Mort and Chris Waters eds., Moments of Modernity,
(London: Rivers Oram Press, 1999), 112–3.
30. Ibid, 112.
31. Iron and Steel AACP Report (1952) in BOD: Macmillan papers,
MS. Macmillan dep, 383.
32. MCA Annual Report, 1965.
33. Tiratsoo, “Limits of Americanisation”, 112–113.
34. Quoted in Tomlinson, The Politics of Decline, 74.
35. Jim Tomlinson, “The British “Productivity Problem” in the 1960s”, in Past
& Present 175, no. 1 (2002): 194; the 1968 Brookings Institute report edited
by Richard E. Caves, Britain’s Economic Prospects (London: The Brookings
Institute, George Allen Unwin, 1968) summarised many of these critiques.
36. Quoted in Henry Strage, Milestones in Management: Essential Reader
(Oxford: Blackwell, 1992), 7.
37. Bank of England archive (hereafter BoE): E 4/67. Paper by James Selwyn,
“Management Consultants in the Bank”, 22 July 1968, 6–7.
38. TNA: T 326/1040. A.A.  Stevens memo to D.M.  Thomson, “Private and
confidential.” November 5, 1968.
39. Cartoon by Trog (Wally Fawkes), Daily Mail, October 30, 1968.
140  A. E. Weiss

40. Jenkins, Thatcher and Sons, 276–77.

41. Bower, Perspective, 90.
42. For more on this see, “McKinsey plum chokes Britain’s own consultants”,
The Daily Telegraph, 30 October 1968.
43. Sampson, The Essential Anatomy of Britain: Democracy in Crisis, 37.
44. Alcon Copisarow, interview with author at the Athenaeum Club, London,
February 16, 2011.
45. Ibid.
46. See TNA: FCO 2/254. “McKinsey Report on strengthening the machinery
of the Government of Hong Kong,” 1973.
47. Alcon Copisarow, interview with author, February 16, 2011.
48. TNA: FCO 40/10, “Strengthening the Machinery of Government report by
McKinsey & Company, Nov 1972”.
49. Alcon Copisarow, correspondence with author, from which was shared:
Alcon Copisarow speech at Eton College on “The Bank of England: Then
and Now”, December 1, 2009.
50. David Vincent, The Culture of Secrecy: Britain, 1832–1998 (Oxford: Oxford
University Press, 1998), vi–x.
51. Edgerton, Warfare State, 264–266.
52. Alcon Charles Copisarow, Unplanned Journey (London: Jeremy Mills
Publishing, 2014), 158–160.
53. Ibid., 178.
54. Financial Times, January 10, 1977, 2.
55. Author interview with Barry Hedley.
56. For a description of the report see McK: Hugh Parker, April 4, 1986. See
Appendix 1 for biography.
57. For Castle’s praise see House of Commons debate, Bus Operators, Road
Hauliers and Ports and Docks Industries (Nationalised), July 18, 1967, vol 750
cc1725–17853.
58. Alcon Copisarow, interview with author, February 16, 2011.
59. McK: Hugh Parker, oral history, April 4, 1986.
60. Barry Hedley, interview with author, March 18, 2011. Biography for Peter
Carey in Appendix 1.
61. For more on Rhodes’ “hollowing-out” thesis see Dennis Kavanagh, British
Politics, 5th ed., 3–63.
62. Geoffrey Rivett, National Health Service History, www.nhshistory.net.
Accessed October 1, 2015.
63. Charles Webster “National Health Service Reorganisation: Learning from
History”, Lecture to the Socialist Health Association, 1998.
64. Rudolf Klein, The New Politics of the National Health Service, 4th ed.
(Harlow: Prentice Hall, 2001), 71–72.
65. Rodney Lowe, quoted in Andrew Denham and Mark Garnett, Keith Joseph
(Chesham: Acumen, 2001), 216.
   Reorganising, 1970s: The 1974 National Health Service…  141

66. Neil Robson, “Adapting not adopting: 1958–1979. Accounting and mana-
gerial ‘reform’ in the early NHS”, Accounting, Business & Finance History,
Volume 17, no.3, 2007, 445–467.
67. A recent witness seminar largely reasserted this view: “Witness Seminar: The
1974 NHS Reorganisation” (The University of London in Liverpool,
November 9, 2016).
68. Klein, The New Politics, 71.
69. See Peter Davies, “Behind closed doors: how much power does McKinsey
wield?”, British Medical Journal, 2012; 344: e2905.
70. See, for example, Peter Draper and Tony Smart, “Structure of the NHS,”
The Times, August 9, 1972.
71. See, for instance, Sampson, The Essential Anatomy of Britain, 37; Heclo and
Wildavsky, The Private Government of Public Money, 1–3.
72. For example: Kynaston, Austerity Britain, 1945–1951.
73. On lack of consensus in postwar British politics, see Peter Kerr, “The post-
war consensus: A woozle that wasn’t?” in David Marsh et al. eds., Postwar
British Politics in Perspective (Oxford: Blackwell, 1999), 66–85. For the
breakdown in response to economic decline and decline of “corporatism” see
Keith Middlemas, Politics in Industrial Society: The Experience of the British
System since 1911 (London: Deutsch, 1980).
74. On the “hollowed-out state” see Kavanagh, British Politics, 53–63.
75. Cited in Kipping and Engwall, Management Consulting: 14.
76. See Saint-Martin, Building the New Managerialist State.
77. J.G.A. Pocock, “British History: A Plea for a New Subject”, The Journal of
Modern History 47, no. 7 (1975): 601–621.
78. See for instance: Rodney Lowe, The Official History of the British Civil
Service; Peter Hennessy, The Hidden Wiring: Unearthing the British
Constitution (London: Gollancz, 1995); P. F. Clarke, Hope and Glory: Britain
1900–2000, 2nd ed. (London: Penguin, 2004). Dominic Sandbrook, for
instance, writes that “I am conscious that my books betray a marked basis
towards England…I am painfully aware of everything – and everybody – I
have had to leave out.” Dominic Sandbrook, State of Emergency. The Way We
Were: Britain, 1970–1974 (London: Allen Lane, 2010), ebook loc Preface.
Accounts of devolution are an exception to this observation. See for instance
Vernon Bogdanor, Devolution in the United Kingdom, New ed. (Oxford:
Oxford University Press, 2001).
79. Burton, The Politics of Public Sector, 11; Accounts of devolution are an excep-
tion to this observation. See for instance Bogdanor, Devolution in the United
Kingdom.
80. Ministry of Health and Scottish Home and Health Department. Report of
the committee of enquiry into the cost of the National Health Service (London:
HMSO, 1956); David Owen, Our NHS (London: Pan Books, 1988).
142  A. E. Weiss

81. Arthur Porritt, “A Report of the Medical Services Review Committee”,

British Medical Journal, 1962: 2, 1178–86.
82. “Administrative Practice of Hospitals Boards in Scotland”, (Edinburgh:
HMSO, 1962).
83. Webster, The Health Services since the War, Volume II, 330; The shape of hospi-
tal management in 1980?: the report of a Joint Working Party set up by the
King’s Fund and the Institute of Hospital Administrators (London: King
Edward’s Hospital Fund for London and the Institute of Hospital
Administrators, 1967); Ministry of Health and Scottish Home and Health
Departments, Report of the Committee on Senior Nursing Staff Structure (The
Salmon Report) (London: HMSO, 1966); Ministry of Health, First Report of
the Joint Working Party on the Organisation of Medical Work in Hospitals (The
Cogwheel Report), (London: HMSO, 1967).
84. See O’Hara, From Dreams to Disillusionment.
85. Webster, The Health Services since the War, Volume II, 336–37; For more on
the role of the Chief Medical Officer in the NHS see Sally Sheard and Liam
J.  Donaldson, The Nation’s Doctor: The Role of the Chief Medical Officer
1855–1998 (Abingdon: Radcliffe, 2006).
86. Charles Webster, The National Health Service: A Political History, 2nd ed.
(Oxford: Oxford University Press, 2002), 87.
87. Department of Health and Social Security, The Future Structure of the
National Health Service (The Crossman Green Paper), (London: HMSO,
1970); David Owen, Bernie Spain, and Nigel Weaver, A Unified Health
Service (Oxford: Pergamon, 1968), vii–viii.
88. Rivett, nhshistory.net, section on: “Rationalisation and reorganisation”.
89. Owen, Our NHS, 54.
90. Sally Sheard, The Passionate Economist: How Brian Abel-Smith Shaped Global
Health and Social Welfare (Bristol: Policy Press, 2013), 246.
91. Ibid., 453.
92. Webster, The Health Services since the War, Volume II, 498.
93. TNA: BN 13/194. Sir Clifford Jarrett memo, February 13, 1970.
94. Webster, The Health Services since the War, Volume II, 497.
95. TNA: MH 159/383. “Assessment of a management consultancy assign-
ment” by D Owen to F.D.K. Williams, February 7, 1974.
96. Ibid.
97. BN 13/169 “NHS Reorganisation (Conservative Administration)  –
Management Study”. c.1972.
98. Bower, Perspective, 182.
99. TNA: MH 159/383.
100. TNA: MH 159/384.
101. TNA: MH 159/383. “Outstanding problems to be done”. Henry Strage to
Philip Rogers, July 31, 1971.
102. TNA: BN 13/169.
   Reorganising, 1970s: The 1974 National Health Service…  143

103. MH 159/388. “Lambeth and Southwark Fieldwork”.

104. MH 159/383. Henry Strage “Billing notes” to F.D.K. Williams, Assistant
Secretary at DHSS. April 18, 1973.
105. Department of Health and Social Security, Management Arrangements for the
Re-organised Health Service: The Grey Book (London: HMSO, 1972), 9–24.
106. Hunter, “Organising for Health: The National Health Service in the United
Kingdom”, 263–300.
107. TNA: MH 159/383. F.D.K. Williams memo to John Archer, Head of Civil
Service Department, June 15, 1971. See Appendix 1 for biography of
F.D.K. Williams.
108. O’Hara, From Dreams to Disillusionment, 1.
109. Webster, The Health Services since the War, Volume II, 454.
110. Ibid; TNA: MH 137/427–8. “Management consultancy assignments for
health minister.”
111. David Owen, interview with author in Mayfair, December 12, 2013.
112. Webster, The Health Services since the War, Volume II, 335.
113. Ibid., 343.
114. TNA: BN 13/194. Sir Clifford Jarrett memo, February 13, 1970.
115. See for example, E. J. Kahn, The Problem Solvers: A History of Arthur D. Little,
Inc, 1st ed. (Boston: Little, Brown, 1986).
116. TNA: MH 159/383. F.D.K. Williams memo on March 2, 1972.
117. As discussed in Saint-Martin, Building the New Managerialist State.
118. TNA: MH 159/383. David Owen memo on January 30, 1974.
119. TNA: MH 159/383. “Management Study: Use of Consultants.”
F.D.K. Williams memo to Mr Dodds. June 5, 1972.
120. TNA: BN 13/94. “Note for the record.” May 5, 1971, 4.
121. TNA: BN 13/194. “Civil Service Manpower.” Keith Joseph note to Edward
Heath. January 6, 1971, 4.
122. TNA: CAB 129/158/19. “The Dispersal Review.” July 27, 1971, 2.
123. Peter Hennessy et al., “Routine Punctuated by Orgies,” 6–17.
124. Michael Shanks, “A Whitehall McKinsey,” The Times, July 24, 1970; for
more on Shanks see Peter Dorey, British Conservatism and Trade Unionism,
1945–1964 (Surrey: Ashgate, 2009), 117.
125. “Business Diary,” The Times, June 7, 1972; “Well managed,” The Times, May
31, 1972.
126. MH 159/383. M.W.  Joyle memo on “NHS Reorganisation.” April 28,
1971; “Sir Kenneth Stowe, civil servant – obituary,” The Telegraph, September
8, 2015.
127. See footnote 489.
128. MH 159/383. M.W.  Joyle memo on “NHS Reorganisation.” April 28,
1971.
129. McKenna, World’s Newest Profession, 8.
144  A. E. Weiss

130. New York City Municipal Archives: NYMA H36.95/su. “Starting up the
New  York City Health & Hospitals Corporation.” March 1970; NYMA
H365.95/pas. “Providing abortion services to the poor in New York City:
[memoranda to] New York City Health and Hospitals Corporation.” June
1970; NYMA H36.11/caf. “Consolidation of administrative functions:
[N.Y.C] Health Services Administration.” 1970; NYMA H36.95/pib.
“President’s initial briefing: [facts and figures … summarized as an aid to the
President of the New York City Health and Hospitals Corporation].” July
1970.
131. “Bain & Company, Inc.: Growing the Business”, Harvard Business School
Case Study, 28 September 1990.
132. The literature on the diffusion of American management techniques in the
immediate postwar period is quite well-developed. See, for instance, Marie-­
Laure Djelic, Exporting the American Model: The Postwar Transformation of
European Business (Oxford: Oxford University Press, 1998); M. Kipping and
Ove Bjarnar, The Americanisation of European Business: The Marshall Plan
and the Transfer of US Management Models (London: Routledge, 1998); and
Jonathan Zeitlin and Gary Herrigel, Americanization and Its Limits:
Reworking US Technology and Management in Postwar Europe and Japan
(Oxford: Oxford University Press, 2000). De Grazia, Irresistible Empire: uses
a “Market Empire” thesis to cover the postwar and late twentieth-century
period. De Grazia focuses on how Hollywood, advertising, and mass com-
modity sales amongst other services helped to make Europe more “America-
like”—though professional services are not explicitly covered in de Grazia’s
work, this book indicates they certainly should be.
133. Tony Benn was a keen proponent of consultancy studies. In 1965, as
Postmaster General, he asked that the Director General allow him to hire
McKinsey to look at the “problem” of upper management structure. As he
recounted in his diaries: “He [the Director General] agreed that McKinsey
should be invited to look at this. This is all I wanted. But in saying this the
Director General said he recognised that I was unhappy and felt that the
Civil Service was obstructive.” During the study, when McKinsey discovered
that staff at the clearing offices in London were not working at night as they
were contracted to do so, yet getting paid as if they were, the firm was rather
surprised by Benn’s reaction. As the Partner-in-Charge of the study, Roger
Morrison recalled: “When Wedgewood Benn found this out, he then called
in the labour unions and read them the riot act. This was a rather notable
achievement given that he was probably one of the greatest allies of the
labour movement in Britain. Yet he acted as though he were a chief executive
with capitalistic inclinations in spite of his strong socialistic tendencies.”
Despite (or perhaps even because of ) Benn’s observation that McKinsey’s
report on the Post Office “said practically nothing that I hadn’t said but we
are paying [them] thousands of pounds a month to say it with greater
   Reorganising, 1970s: The 1974 National Health Service…  145

authority,” he sanctioned the joint McKinsey and CPRS study and his
department procured a further 11 consultancy assignments in 1975 alone.
McK: Roger Morrison, oral history; Benn, Out of the wilderness, diary entry
for July 28, 1965.
134. See Table 17.
135. Antony Graham, correspondence with author between February 15 and
February 20, 2011.
136. Alan David Bacon, The Conservative Party and the Form of the National
Health Service, 1964–1979, (Brunel University: Doctoral Thesis, 2002),
footnote 268. See Appendix 1 for biography of Elliot Jacques.
137. R.S. Matthews and R.J. Maxwell, “Working in Partnership with Management
Consultants”, Management Services in Government, 1974, 27–39.
138. Greater use of secondments was recommended in the Fulton Report. See
TNA: BA 1/60, Fulton Report Vol 2, 79.
139. Fulton Report Vol 2, Chapter 3, 41.
140. Matthews, Maxwell, “Working in Partnership”, 32.
141. BOD: Sir Philip Rogers papers: MS. Eng c.2194. Strage’s note to Rogers,
June 24, 1975. See Appendix 1 for biography.
142. See Appendix 1: Key characters by chapter.
143. McK: Henry Strage, May 20, 1987.
144. During 2010 to 2013, an unofficial Labour Party slogan was “You can’t trust
the Tories with the NHS.” See, for instance, Mary Riddell, “The NHS is not
a creaking relic, whatever the Tories may say”, The Telegraph, July 16, 2013.
145. Webster, The Health Services since the War, Volume II is divided in chapters by
political party attitudes to the NHS, not chronology.
146. “Report of the Medical Services Review Committee. Summary of conclu-
sions and recommendations”, British Medical Journal, 1178–86.
147. Stephen M. Shortell, Geoffrey Gibson, “The British National Health Service:
Issues of reorganisation”, Health Services Research, Winter 1971.
148. Webster, The National Health Service, 109; ‘National Health Service
Reorganisation: Consultative Document’, (London: HMSO, 1971); Peter
Draper and Tony Smart, “Structure of the NHS”, The Times, 9 August 1972.
149. TNA: BN 13/165. Keith Joseph memo on “National Health Service
Reorganisation: A Regional Tier.” September 26, 1970.
150. Webster, The Health Services since the War, Volume II, 344.
151. House of Commons debate, Budget Resolutions and Economic Situation,
March 17, 1969, vol 781 cc1372.
152. Owen, Our Nhs, 55.
153. Ibid.
154. Sheard, The Passionate Economist, 146; ibid., 243.
155. Webster, The Health Services since the War, Volume II, 461.
156. Ibid., 462–63.
157. Ibid., 502–03.
146  A. E. Weiss

158. TNA: MH 159/383. David Owen memo. January 30, 1974.

159. For the Irish Health Service Report see Towards Better Health Care:
Management in the Health Boards, Vols 1–4 (McKinsey & Company, 1971);
“National Health Service Reorganisation: Consultative Document”,
(London: HMSO, 1971).
160. Webster, The Health Services since the War, Volume II, 487.
161. TNA: AN 124/195. “Restructuring the Railway Field Organisation,” British
Rail/McKinsey & Co. report, April 1971, 4.
162. Webster, The Health Services since the War, Volume II, 498.
163. Ibid., 497.
164. The “Grey Book” was formally published as Management Arrangements for
the Reorganised National Health Service (London: HMSO, 1972).
165. TNA: BN 13/167. “Membership of the Management Study.” Undated,
likely 1972.
166. TNA: MH 159/383. “Assessment of Management Consultants Assignment.”
David Owen, January 30, 1974.
167. TNA: MH 159/383. F.D.K. Williams memo to the CSD on “The Use of
Management Consultants by Government Departments.” March 2, 1973.
168. Ibid.
169. McK: Henry Strage, May 20, 1987.
170. TNA: CAB128/57/8. “Cabinet Conclusions: minutes and papers.” July 29,
1975.
171. David Giachardi, interview with author, March 9, 2011.
172. Bradford University (hereafter BRAD): Barbara Castle diary notes, entry for
July 29, 1975.
173. Gerald Kaufman, interview with author, March 8, 2011.
174. Ibid.
175. House of Commons debate, Shipbuilding (Booz-Allen Report), May 16, 1973,
vol 856 cc348.
176. Barry Hedley, interview with author, March 18, 2011.
177. See for instance Daniel Guttman and Barry Willner, The Shadow Government.
178. BRAD: Barbara Castle diary notes, “Today was retribution day for Wedgie”,
July 29, 1975.
179. Author interview with Barry Hedley.
180. Cited in Bacon, Conservative Party and NHS, footnote 153; ibid., 234.
181. TNA: BS 6/3511. ‘Discussion with Mr J Banham of McKinsey & Co.’ June
13, 1978, 2.
182. See Alfred Kieser quote, footnote 22; see also Craig and Brooks, Plundering
the Public Sector; “The management consultancy scam,” The Independent,
August 20, 2010; “Masters of illusion: The great management consultancy
swindle,” The Independent, September 17, 2009.
   Reorganising, 1970s: The 1974 National Health Service…  147

183. Webster, The Health Services since the War, Volume II, 498.
184. David Owen, interview with author, London, December 12, 2013. See
Appendix 1 for biography.
185. For more discussion on this incorrect perception, see Hunter, “Organising
for Health: The National Health Service in the United Kingdom”,
263–300.
186. Ibid.
187. Ibid.
188. Management Arrangements for the Reorganised National Health Service in
Wales (Cardiff: HMSO, 1972); Booz Allen Hamilton, An integrated Service:
The Reorganisation of Health and Personal Social Services in Northern Ireland
(London: HMSO, 1972).
189. Reorganised NHS in Wales, 2–8.
190. An integrated Service, 2–5.
191. For comments on the uniqueness of Scotland, see: John Stewart, “The
National Health Service in Scotland: 1947–1974: Scottish or British?”,
Historical Research 76, no.193, 2003, 389–420.
192. Pocock, “British History: A Plea for a New Subject”, 601–621.
193. For more on the similarities in the health services across the jurisdictions see
N.  W. Chaplin, Health Care in the United Kingdom: Its Organisation and
Management (London: Kluwer Medical, 1982), 83.
194. Since devolution the jurisdictions have again taking differing paths of NHS
reform. See NAO, Healthcare across the UK: A comparison of the NHS in
England, Scotland, Wales and Northern Ireland (London: HMSO), June
2012.
195. TNA: MH 159/383. Memo from F.D.K. Williams on May 23, 1972.
196. Davies, “Behind Closed Doors”, BMJ, 2012.
197. See Saint-Martin, Building the New Managerialist State.
198. TNA: MH 159/383. M.W. Joyle memo on April 29, 1971.
199. TNA: MH 159/383. R. Gedling memo to Sir Philip Rogers, “Continued
Employment of McKinsey & Co.” May 25, 1972.
200. TNA: MH 159/383. Memo from F.D.K. Williams on May 23, 1972; and
TNA: MH159/393. Memo from Beyfield on May 25, 1972.
201. TNA: MH 159/383. Memo from J.P. Dodd. June 6, 1972.
202. TNA: MH 159/383. R. S. Swift memo confirming McKinsey appointment.
December 18, 1970.
203. Vincent, Culture of Secrecy, 42; ibid., 135.
204. Webster, The National Health Service, 110.
205. Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries
and Competitors (New York: Free Press, 1980).
206. TNA: BS 6/3511. “Discussion with Mr J Banham of McKinseys (sic.) &
Co. Inc.” June 13, 1978.
148  A. E. Weiss

207. For reactions see Webster, The Health Services since the War, Volume II, 574.
208. McK: Henry Strage, May 20, 1987.
209. Rob Maxwell, Healthcare: The Growing Dilemma (McKinsey & Company,
1972); Hansard, HoC debate, July 29, 1972, vol 878 cc 123–51.
210. Davies, “Behind closed doors”, BMJ, 2012.
211. Ibid.
 4
Automating, 1980s: Arthur Andersen
and the Operational Strategy

Many DHSS offices are rather squalid and understaffed places and poor and
underprivileged people often have to wait in long queues for hours before receiv-
ing attention and being handed their benefit. (Baroness Turner of Camden,
December 19, 1988)1

As Baroness Turner’s comment indicates, visiting a local social security ben-

efit office in 1980s Britain was a pleasant experience for few. Dingy, smoke-­
filled offices were littered with signifiers of a lack of trust between benefits
clerks and claimants; ashtrays were pinned down to prevent theft, protective
screens were in place to minimise attacks on staff.2 Claimants would visit their
local office (LO) or Unemployment Benefit Office (UBO) to collect or request
a bewildering array of benefits (see Figs. 4.1 and 4.7) which had to be requested
and processed on a benefit-by-benefit basis, requiring repeated queuing or
multiple visits to offices. Long waits for claimants were the norm.3 The experi-
ence was little better for officers. As the New Society recounted in a piece on
the DHSS’ operations in 1982:

Arthur Andersen’s consulting wing split (though remained part of the same legal entity as Arthur
Andersen) in 1989 and became Andersen Consulting. For the purposes of clarity the consultancy is
referred to as Arthur Andersen throughout, unless quoting a source. In a similar manner, in 1988 the
Department of Health and Social Security split and became the Department of Social Security and
Department of Health. In this instance, the appropriate departmental name is used in the context of
the period being discussed.

© The Author(s) 2019 149

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3_4
 150  A. E. Weiss

16000
Total contributory cost = £19 bn Total non-contributory cost = £12 bn Other = £1 bn
14000

12000
Expenditure (£m)

10000

8000

6000

4000

2000

Fig. 4.1  DHSS expenditure on social security benefits, 1982–1983. (CAB 129/215/3,
“Public Expenditure: Objectives for 1982 Survey,” Memo by Chief Secretary, Treasury,
July 8, 1982, 122–123)

A civil servant goes to open the social security offices in the Birmingham suburb
of Erdington, sees about 8 people in the queue outside – and promptly collapses
in tears.4

After receiving their giros or chequebooks on departing the LO, it would

not be unusual for a claimant to walk past a newsagent and be confronted
with headlines warning of “scrounger mania” and the rise of “work-shy
leeches”—benefits claimants who were accused of threatening the fabric of
British society by “feeding off hard-working, ordinary [people].”5
The infrastructure which administered the three types of benefits in Britain
(insurance-related, such as pensions; non-contributory, tax-supported, such as
Child Benefit; and means-tested supplementary, such as income support) was
large, unwieldy, and bureaucratic. It was, importantly, entirely state owned
and run, and based almost exclusively outside of Whitehall, with centres in
Newcastle (as the primary centre), Reading, and Fylde. In the financial year
1981–1982, £1.4 billion was spent on administration costs. These costs went
towards delivering 1.2 billion payments covering £27 billion in benefits (of
which there were at least 30 different types of benefits) to an estimated 29 mil-
lion beneficiaries. The service required 117,000 staff, the bulk of whom worked
on the front-line at one of the 1050 UBOs or 780 LOs. Confusingly, ultimate
responsibility for delivering benefits lay with the DHSS, although it worked
closely with the Department for Employment which was responsible for the
staff who administered unemployment benefits.6 In the words of the DHSS’
Second Permanent Secretary at the time, Geoffrey Otton, the administrative
architecture resembled the “flamboyant elaboration of a Gothic Cathedral.”7
   Automating, 1980s: Arthur Andersen and the Operational Strategy  151

From 1977 to 1991 the DHSS (and its successor, the Department of Social
Security (DSS)) sought to simplify the administrative process of delivering ben-
efits through a programme of work called the “Operational Strategy.” In 1991,
it was described by the Secretary of State for Social Security, Ann Widdecombe,
as the “biggest and most ambitious computerisation programme in Europe.”8
The Operational Strategy aimed to “achieve greater efficiency in the adminis-
tration of social security operations, better service to the public and more satisfy-
ing work for staff.” In total, this endeavour cost £2.6 billion (at 1993 prices).9 Of
this amount, at least £315 million was believed to have been spent on external
consultancy firms, with the vast majority of this sum paid to Arthur Andersen,
an American consulting firm specialising in computerisation and operational
work.10 At the peak of its earnings, the firm—which was the world’s largest con-
sultancy in the 1990s—generated around £100 million in revenue in a single
year for its work, and, until the company changed its name to Accenture in 2001,
the DHSS was its biggest single client in its nearly 90-year history (Table 4.1).11
The history of the Operational Strategy raises a number of questions about
the British state. What were the political aims of the Operational Strategy?
Why were consultants used for the work? How did the state react to such a
major and sustained use of consultants? In order to answer these questions,
this chapter briefly reflects on the current historiographical verdict on the
Operational Strategy, before (in acknowledgement of the relative paucity of
coverage on the history to date) a detailed chronology of the computerisation
work is laid out. After this, three major areas of interest are explored: the rela-
tionship between the civil service and consultants; the political significance of
the computerisation of benefits; and the issue of where accountability and
leadership of the Strategy lay. Finally, the implications of the Strategy and
Arthur Andersen’s role in it are considered in the wider context of the ques-
tion of how the state has been changed by the use of consultants.
However, before embarking on an analysis of the Operational Strategy, this
chapter first addresses two issues: where this accounting generation of consul-
tancies emerged from, and why the British state turned to outside expertise
for automation.

The Accounting Generation Emerges

We weren’t the white-shoe type of consultants like McKinsey; we implemented
and got things done.12 (Keith Burgess, Managing Partner, Andersen Consulting,
1971–2000)
Accountants muscle in [to UK consultancy market].13 (Financial Times, January
29, 1971)
152  A. E. Weiss

Table 4.1 DHSS expenditure on social security benefits and claimant numbers,

1982–1983
Expenditure Recipients
Category Benefit (£m) (000s)
Contributory (i.e. paid from Retirement pensions 13,449 9040
National Insurance Fund) Unemployment benefits 1999 450
Invalidity benefit 1397 610
Widow’s pension 722 450
Sickness, injury, 720 530
maternity
Industrial disablement 355 195
Widow’s allowance 102 35
Lump sum payments 99
Non-contributory (i.e. those Supplementary 4311 1950
met from voted allowances
expenditure) Child benefit 3796 13,120
Supplementary pensions 1366 1700
Rent rebates 888
War pensions 508 330
Attendance allowance 324 310
Mobility allowance 205 230
Invalidity pension 141 180
Rent allowances 83
Family income support 71 115
Old person’s pensions 38 40
Maternity 19
Lump sum 5
Other Admin and 1310
miscellaneous
Local authority admin 28
of housing benefits
Total 31,936 29,285
Data from TNA: CAB 129/215/3. Cabinet paper on “Public Expenditure: Objectives for
1982 Survey” by Leon Brittan. Recipients may have received more than one benefit

By 1984 the MCA, once the bastion of the British generation of consul-
tancy firms, was dominated by the consultancy divisions of major multina-
tional accounting firms (of both British and American origins); as Keith
Burgess’ quote shows, these firms sought to differentiate themselves from the
previous “American generation” of consultancies. In 1967 the income of the
Big Four (Associated Industrial Consultants, Personnel Administration,
Production Engineering, and Urwicks) represented 76 per cent of all MCA
revenues. Just 12 years later the major accounting firms—known collectively
at the time as the “Big Eight”—were all members of the MCA and consti-
tuted 51 per cent of all MCA public sector UK revenues. Table 4.2 shows how
total income for this new generation grew rapidly from 1967 to 1984
   Automating, 1980s: Arthur Andersen and the Operational Strategy  153

Table 4.2  Income of the Big Eight

Total income (UK and
overseas), £m % of total MCA income
Big Eighta 1967 1979 1984 1967 1979 1984
Arthur Andersen n/a 3.6 12.2 n/a 7 10
Arthur Young n/a n/a 3.1 n/a n/a 3
Coopers & Lybrand 0.9 6.8 20.3 7 13 17
Deloitte, Haskins & Sells n/a 1.8 6.2 n/a 3 5
Ernst & Whinney n/a 0.4 3.3 n/a 1 3
Peat Marwick Mitchell 0.5 4.1 7.3 4 8 6
Price Waterhouse 0.2 2.9 18.4 1 5 15
Touche Ross 0.2 1.3 4.1 1 2 3
Total 1.7 20.8 74.8 13 39 63
Source: Collated, compiled, and analysed by author. Annual company returns found in
Management Consultants Association archives; boxes 22, 23, and 24
Notes: “Big Eight” includes: Arthur Andersen, Coopers & Lybrand, Price Waterhouse,
Arthur Young, Peat Marwick Mitchell, Deloitte, Haskins & Sells, Touche Ross, and
Ernst & Whinney. All included in 1984 figures, Arthur Young not included in 1979
figures. “State” work in 1967 is defined as work undertaken for “Government
departments,” “Local authorities,” or “Miscellaneous services” according to the
Board of Trade Industrial classification scheme. “State” work in 1979 and 1984 is
defined as “public sector” work, as recorded in MCA company returns
All figures noted are for consultancy revenues only; no accounting revenues are
included. Where figures are not available firms were not MCA members. Figures for
1974 for Deloitte, Haskins & Sells are for Deloitte, Robson, Morrow
a
The Big Eight were not only the accounting firms whose consultancy divisions were
members of the MCA.  In 1979 other accounting firm members included: Atkins
Planning; Binder, Hamlyn, Fry & Co; and Thornton Baker & Associates. Source:
Company returns, MCA: box 22

In 1979 the Big Eight collected £2.3 million in revenues from the British
public sector. By 1984 this had risen to £20 million, three-quarters of all
MCA public sector income (see Table  A.3 for assignments undertaken by
these firms).14
As the Financial Times headline, above, shows where British firms had tra-
ditionally specialised in achieving productivity increases through efficiency
studies, this latest generation of consultancy firms of accountancy origins had
gained pre-eminence through computer technologies and devising and install-
ing financial information systems (FISs) (see Table 4.3).
The connection between computers and accountancy was long held. Arthur
Andersen & Co. were the first firm to install the UNIVersal Automatic
Computer I (UNIVAC) computer for General Electric in 1953. In doing so,
they automated processes for payroll, material scheduling and inventory con-
trol, order service and billing, and cost accounting tasks.15 Other accounting
firms were quick to catch up on Andersen’s computer expertise. In 1963 Price
 154 

Table 4.3  Big Eight companies’ revenue split by service line as a % of MCA total (UK only), 1974
1974
Management
Organisation information
A. E. Weiss

development Marketing, Personnel Economic and systems and

and policy Production sales, and Finance and management environmental electronic data
Big Eight formation management distribution administration and selection studies processing
Arthur 0 15 4 37 0 0 44
Andersen
Arthur Young n/a n/a n/a n/a n/a n/a n/a
Coopers & 20 4 4 23 3 8 38
Lybrand
Deloitte, 6 0 1 55 1 6 31
Haskins &
Sells
Ernst & n/a n/a n/a n/a n/a n/a n/a
Whinney
Peat Marwick 22 6 5 29 5 10 24
Mitchell
Price 13 2 0 50 8 2 26
Waterhouse
Touche Ross 6 3 1 50 12 0 28
Source: Collated, compiled, and analysed by author. Annual company returns found in MCA: boxes 22, 23, and 24. See definitions in
footnote 612
   Automating, 1980s: Arthur Andersen and the Operational Strategy  155

Waterhouse had helped to install computers for 60 clients; by 1967 this had
risen to 275.16
Like the British and American firms, this new generation of consultancies
also shared highly distinctive origins and identities. Accounting firms had pro-
vided advisory services to their clients throughout the Victorian era, and there-
after. Most notably, in the second half of the nineteenth century, William
Welch Deloitte’s firm (the forerunner of Deloitte Touche Tohmatsu) under-
took a series of assignments investigating fraudulent transactions in the Great
Northern Railways, Great Eastern Steamship Company, and London and
River Plate Bank. According to Derek Matthews et al., this work was “indis-
tinguishable from latter-day management consultancy.”17 But critically, this
work was ad hoc and unusual; hence it was termed “special work.”18 It was not
until the 1960s (for reasons addressed later) that accountancy firms formally
developed internal departments which provided “Management Consultancy
Services” or “Management Advisory Services.”19 In terms of staffing arrange-
ments too, the accountancy firms were considerably different in nature. Where
the Big Four often recruited individuals with industrial experience and the
American firms sought Oxbridge or business school graduates, in the early
years at least, the accounting firms’ consulting divisions were largely staffed by
qualified accountants or computer specialists.20 Similarly, potential clients
viewed these three types of consultancy firms distinctly. As James Selwyn wrote
when considering bringing management consultants into the Bank of England
in 1968 (he was not considering American consultants at this point for fear of
the potential political fallout, although McKinsey was eventually hired):

They have varied origins, some having developed through … “time and motion”
and others from accountancy. Those of accountancy origin …are probably
stronger on financial control, cost analysis and organisation of management
[than the Big Four firms].21

Accounting firms first entered the British consultancy market in 1966,

when the six major British firms joined the Management Consultants
Association: Annan Impey Morrish; Binder, Hamlyn, Fry & Co.; Cooper
Brothers & Co.; Peat, Marwick, Mitchell & Co.; Price Waterhouse & Co.;
and Robson, Morrow & Co. (Arthur Andersen were eventually admitted in
1969 after an earlier attempt was rejected).22 The MCA addressed the rather
controversial issue of admitting the “management consulting division of the
accountancy profession” by asserting “we believe it is in the best interests of
our profession and our clients,” though it did not elaborate on the point.23
However despite this relatively early entry into the consulting market, the
156  A. E. Weiss

computer work which the accounting firms sought to provide was already
well catered for by the specialist divisions of existing British firms. Urwick
Diebold (UD), the computer and systems division of Urwick, Orr & Partners,
was a leading provider of computer consultancy services by the late 1960s. In
1969, UD was selected to advise the newly instituted Open University on the
use of computers in the areas of administration, student computing, computer-­
assisted learning, and academic research.24 A few years later, a team of four
from UD also advised the Royal Ordnance Factories on a “computer strategy
for the total organisation, involving sites throughout the UK which embraced
the manufacture of explosives, ammunition, small arms, fuses, field guns and
military vehicles including the Chieftain tank.”25 As the case of Urwicks
shows, despite their early origins in production engineering and time and
motion studies, the Big Four reacted to the growing demand for computer
consultancy work positively. PA, P-E, and Inbucon all established computer
divisions and IT service lines in the 1960s.26 The high-profile assignments
undertaken by Urwicks highlight the fact that in the late 1960s, it was the
British firms that dominated the state market: in 1967 the Big Four still
undertook 85 per cent of all “public administration and defence” assignments
recorded by the MCA.27
However by 1979, Arthur Andersen took earnings of £734,000 from the
public sector and Coopers and Lybrand £646,000, compared with Urwicks’
£441,000. Three factors help to explain how the accountancy firms overtook
the British firms. The first highlights the precarious nature of consultancy. The
economic recession and oil shocks of the 1970s hit consultancy firms particu-
larly hard. Total MCA revenues fell by 7 per cent, staffing numbers were cut by
12 per cent, and client numbers fell by 4 per cent from 1971 to 1972.28 Three
years later it was reported that PA suffered a “traumatic and sizeable reduction
in the number of consultants employed.”29 As Fig. 4.1 shows, a substantial dip
in public sector revenues is noticeable post-IMF bailout. The original Big Four
firms were worst hit precisely because they were the market leaders; during
the so-called halcyon days of consulting in the 1960s the firms had over-
expanded and over-recruited.30 The second and related reason the accounting
firms were able to benefit from the British difficulties is because they were
much better placed to weather the storm in the consulting market. Unlike the
British firms, due to their split revenue streams of accounting and consultancy
(and often tax work too), when the consulting market was badly hit the
accounting firms could consolidate their efforts in their other practices. Price
Waterhouse did just this after the secondary banking crisis of 1973, concen-
trating their efforts in accounting work or consultancy work for international
agencies, primarily in Africa.31 Similarly, the American consultancy firms such
as McKinsey & Company also suffered badly in the 1970s, but their global
   Automating, 1980s: Arthur Andersen and the Operational Strategy  157

reach meant they were more immune to region-­specific market shocks. Third,
accounting firms already had long-standing relationships with the British state.
Accounting firms had previously offered proto-­consultancy services in the
form of “special work.” However, from the 1970s onwards these services
became a formalised company offering, as opposed to ad hoc undertakings
usually aimed at satisfying unusual requests from existing clients. Similar to
“special work,” most of these new consultancy ­assignments were for existing
audit clients from accounting work. For instance, in the 1960s, 72.5 per cent
of Price Waterhouse’s “systems development” work (later renamed “manage-
ment consultancy services”) was for current audit clients.32 This is highly sig-
nificant, and gives an insight into how the accounting firms established their
presence in state work. As Arthur Andersen reminisced on the early systems
work for his eponymous company:

The idea in creating the so-called systems work was to bring the suggestions of
having gone through all the records and all the company’s affairs and that, out
of that, there should be a lot of observations [of the company] that your knowl-
edge would bring to the fore.33

Consequently, it seems likely that the consultancy divisions of accounting

firms benefited hugely from the connections forged from accountancy work.
The 1972 Local Government Reform Act also had a significant impact in increas-
ing the amount of local government work for accountants; by 1974 for instance,
Price Waterhouse were the sole auditors to the City of Birmingham and by the
1980s the vast majority of the firm’s public sector consultancy services were for
local authorities.34 The increasing use of accountants for state work had a sub-
stantial knock-on effect on the ease in which they could offer their expanding
consultancy services.35 Not only had relationships already been developed
through the audit work of accountants, clients could save on the inevitable trans-
action costs associated with hiring new professional service providers.
In addition to the accountancy links, Arthur Andersen—the main focus of
the case study—had further links with the British state, developed in the 1960s
and 1970s through the field of operational research (OR). The networks from
OR would prove critical in giving Arthur Andersen an entry into the world of
British elites, and in particular, elites at the vanguard of scientific analysis.
According to the economic historian Maurice Kirby, OR was the “application
of the methods of science to complex problems arising in the direction and
management of large systems of men, machines, materials, and money in
industry, business and defence.”36 OR gained prominence during Allied efforts
in the Second World War as part of the British Bomber Command’s strategy
of aerial attacks on German main cities. In the postwar period, there were
158  A. E. Weiss

efforts to apply its techniques beyond the military to central and local govern-
ments, and the nationalised industries, from which Andersen benefited.37
Significantly for our concerns here, Arthur Andersen had developed a small
but modestly successful OR service to government departments, setting up a
Government and Operational Research Division headed by David Kaye in
the early 1970s.38 Through several studies for the Ministry of Defence, Home
Office, and then the DHSS (see Table A.3), Andersen’s work became known
to the civil servant Peter Turner who worked in the OR branch of the Civil
Service Department.39 In 1973, Turner was promoted to head the joint
Treasury and Civil Service Department Operational Research Unit.40 In this
same period, confidence in the Treasury’s system for planning and controlling
public expenditure—the Public Expenditure Survey Committee (PESC)—
was in shreds.41 The large shifts in prices and wage rates and subsequent rap-
idly accelerating inflation rates which Britain had experienced since 1972 had
rendered the PESC’s forecasting plans largely irrelevant. In 1975 the govern-
ment overspent by £6.5 billion compared to the PESC forecast.42 Such was
the lack of confidence in PESC that in 1975 the Select Committee on
Expenditure concluded: “The Treasury’s present methods of controlling pub-
lic expenditure are inadequate in the sense that money can be spent on a scale
which was not contemplated when the relevant policies were decided upon.”43
This was something Turner had long noted. Reminiscing on this period in
2011, David Kaye, who knew Turner from the “OR fraternity,” recalled that
Turner had “decided that Treasury had no effective means of monitoring
spending departments to take into account inflation – the system was bro-
ken.”44 In response to this loss of expenditure control, a system of cash
limits—defined as “an administrative limit on the amount of cash that the
Government proposes to spend on certain services, or blocks of services”—
was imposed on the PESC.45 To determine what these cash limits needed to
be, a new FIS was proposed for monitoring the cash flow of each expenditure
programme. Firmly embedded in the OR network, Arthur Andersen were
invited to tender for the work; they won the project and undertook the devel-
opment and installation of the system through a team composed of consul-
tants from Arthur Andersen and executive Treasury officers.46 As Kaye
recollected, this time in 2013, the work—for which Arthur Andersen received
£276,000—was highly prestigious, and undoubtedly helped build the case for
Andersen’s eventual work on the Operational Strategy. As Kaye described,
“having the Treasury on your corporate CV is very good – you don’t get any
higher [in terms of reputation].”47
It is worth reflecting on the nature of the OR “fraternity” here, and its
implications for our understanding of different generations of consultancies
and how they interacted with the state. Though there were differences between
   Automating, 1980s: Arthur Andersen and the Operational Strategy  159

the accounting and American generations, Arthur Andersen, like McKinsey,

operated firmly within the British elite. For example, Patrick Rivett, Arthur
Andersen’s American Head of Operational Research from 1961, was invited to
the Athenaeum Club in 1963 by the Earl of Halsbury to meet with the recently
appointed Vice-Chancellor of (the newly formed) University of Lancaster, Sir
Charles Carter, and its Chairman of the planning board, Sir Noel Hall.48 Rivett
was offered the role of chair of OR in the university and he accepted it, despite
a salary drop from £5500 per  annum at Andersen to £3200 at Lancaster.49
Rivett’s standing in OR networks helped raise Arthur Andersen’s profile in the
state. In 1968, Rivett was party to the discussions with William Armstrong,
Permanent Secretary of the Treasury, which led to the creation of the
Operational Research Unit—the same unit which Peter Turner headed when
he turned to Andersen for support in the FIS implementation some seven
years later.50 Of course, within these elite, scientifically minded networks, there
were important subtleties. Whilst McKinsey targeted the “Oxbridge” network
initially, Arthur Andersen, with their focus on OR in Britain, aligned more
closely with “red-brick” universities. OR, for instance, was most prominent in
the universities of Birmingham, Lancaster, Imperial College, and Strathclyde.51

* * *

The British firms, with the exception of PA Consultants, never recovered from
the trauma of the 1970s. Inbucon/AIC had already been bought by the com-
puter consultancy Leasco in the late 1960s and no longer resembled anything
like the Bedaux Company from which it was born.52 In 1986  in search of
economies of scale it merged with P-E (then called P-E International), and
ten years later the new entity was purchased by the IT services company
Lorien.53 Urwicks was eventually bought by Price Waterhouse for a mere
£500,000  in 1984.54 Throughout the 1980s PA consolidated their efforts
abroad and in computer consultancy, becoming more and more like the
accounting firms who they increasingly viewed as their competitors. Yet by
the early 1980s the glory days of the British Big Four were long gone, and the
accountants were on the rise.
During this same period, our fourth generation of consulting firms emerged:
“data processing” (see Table  A.4 for a detailed breakdown). As Matthias
Kipping has described, this generation—specialising in IT—diversified into
consulting from IT services from the 1970s onwards. Most of these companies
were either UK-based or with a long-standing presence in the United Kingdom,
such as CSC, Capgemini Sogeti, ICL, IBM, Computer Management Group,
or Logica. In Kipping’s words, “all of these firms gradually evolved [from
hardware of software services] towards the higher value added activities of
160  A. E. Weiss

outsourcing and IT-related consulting, often involving the implementation of

large-scale management information systems and related organisational
changes.”55 As demonstrated in the Operational Strategy case study, during
this period the blurring of lines demarcating the work of different generations
began; Logica, for instance, worked closely with Arthur Andersen on the
Operational Strategy, highlighting how these firms began to work more as
partners than competitors for the first time.

Losing the Lead in Computerisation

[I had] a virtual complete lack of any technical understanding which I was not
much minded to rectify.56 (Sir John Herbecq, Under Secretary, Civil Service
Department (1968–1981))
Different parts of the Civil Service used [different] consultants at different
times, and for different reasons. There were maybe three phases. In the 1960s
and 1970s, there was some opening up, but limited only to some parts of
Whitehall, not whole tracts. In the 1980s, there was more use, but only by some
departments, and probably to get around Mrs T’s manpower limits. There was
much more use of [Rayner] scrutinies and the Efficiency Unit. Later on, the
main way consultants came in was through technology.57 (Richard Wilson,
Baron Wilson of Dinton. Secretary of the Cabinet and Head of the Home Civil
Service (1998–2002))

In order to understand the background to the Operational Strategy, first we

must trace the history of state automation. As Richard Wilson’s quote sug-
gests, consultants played an important role in this history. In the second half
of the 1960s, British government computer policy was focused on establish-
ing a fully mechanised state adopting the latest computer technologies using
internal state resources.58 The verdict on the state’s performance in this regard
is mixed. The state certainly did modernise its computational capacities dur-
ing this period. A CSD report observed in 1978 “how greatly the main
­administrative operations of central government now depend on ­computers.”59
However the journey was riddled with failures and botched projects. As the
CSD noted earlier in the decade, “there is some validity in the criticism that
departments have slipped from their earlier position as national leaders in
computer development.”60 The use of management consultants for large-scale
computerisation projects sheds light on how the state tried to remedy this.
As Fig. 4.2 highlights, the modernising nature of the Wilson governments
placed a high emphasis on technology and innovation. A memorandum from
   Automating, 1980s: Arthur Andersen and the Operational Strategy  161

Fig. 4.2  “For the Man Who Has Everything…the Fabulous Desiccated Calculating
Machine.” (©British Cartoon Archive, University of Kent, Arthur Horner, New
Statesman, December 17, 1979. Reproduced with the kind permission of the estate of
Arthur Horner)
162  A. E. Weiss

the Chancellor, James Callaghan, in 1965 demonstrates how IT was at the

heart of the first administration’s aims. Callaghan ordered “a quick review of
the favoured ADP [automatic data processing] programs for government
departments [with regard] to the scope for accelerating and expanding the
existing programmes.”61 Up until the late 1960s, this modernisation took
place through use of the government’s in-house resources—the Treasury’s
Organisation and Methods (O&M) team.62 In 1955 there were 356 O&M
officers of “middle-level executive-class” rank in the Treasury, who were there
to serve either government departments or the nationalised industries. By
1958, the O&M officers had installed or ordered computers for seven govern-
ment departments, and by 1965, 45 computers were installed across govern-
ment and a further 200 to 300 installations envisioned within the decade. In
this period, according to Jon Agar, “official visitors from overseas and from
industry, commerce and local government came to learn from O&M.”
However, by the early 1970s O&M began to retreat in influence, no longer at
the heart of the “mechanisation” and modernisation drives of government.
Agar, who has written on the use of computers by the British government,
finds this retreat—exemplified by Sir John Herbecq’s quote above—“difficult
to explain.”63
This can in fact be explained by a deliberate government policy to turn to
outside expertise instead of using in-house resources. Agar is right to note the
substantial work that a small number of executive officers achieved—there
were around 750,000 civil servants in the 1960s by comparison with the small
number of O&M mechanists.64 However the work that Treasury O&M offi-
cers undertook—automation of routine tasks such as punch cards—was very
different in nature to the large-scale installation of mainframe computers in
regional centres and the increasing use of connected terminal computers
inside departments that computerisation entailed in the 1970s.65 By 1972
there were 4640 trained IT staff in central government, but in practice it was
still insufficient to computerise the entire machinery of the state.66 Within
government and civil service circles this problem became increasingly appar-
ent. In a report on the future of computers in government in 1969, Reay
Atkinson (the future head of the Central Computer Agency) noted the
“severe” shortage of internal computer specialists within the civil service.67
Furthermore, as Rodney Lowe has highlighted, there was, on occasions,
antipathy within the upper echelons of the Service towards technical changes.68
Acknowledging, with considerable regret, the need for external resources to be
brought in, Atkinson was rebuked by a specialist government adviser for his
attitude. Clive De Paula responded to Atkinson’s otherwise highly praised
report by stressing:
   Automating, 1980s: Arthur Andersen and the Operational Strategy  163

This attitude to expert professional advice – that it is a last resort to be turned to

“in extremis” – runs contrary to the approach of many of the most successful
users of computers. In such a highly technical and rapidly changing field [gov-
ernment should] make continual use of the best professional assistance they can
get …[Getting] suitably qualified outside consultancy firms…would have the
added benefit of bringing in outside experience, and providing cross-­fertilization
with standards used in this connexion in industry and commerce.69

Confronting the issue of the cost of hiring consultants head-on, de Paula

invoked private sector comparisons: “The Prudential [a British insurance
company] operates on a scale comparable to that of most Government depart-
ments…it does not seem to be put off by high [consultant] fee rates, probably
because it does not confuse the price of something with its value.”70 The mes-
sage from de Paula was clear: computer consultants were the answer to the
government’s internal resource deficiencies.
As a result of the Fulton Committee’s findings, internal government com-
puter specialists (staffed almost exclusively in Treasury O&M) were relocated
in the Management Services (Computing) Division of the Civil Service
Department.71 (As a side issue, taking O&M out of the Treasury into the oft-­
sidelined CSD may have inadvertently diminished the standing of O&M in
government.) At the same time, it seems that de Paula’s advice was adhered to.
In 1973 the CSD published a “Code of Practice for the use of Computer
Consultants and Software Houses by Government Departments,” similar to
the 1965 Treasury “Code of Practice on the Use of Management Consultants.”72
The guide noted that “departments are likely to make greater use of the special-
ist resources of the software industry to satisfy their computing requirements,”
and that “government benefits from close contact with outside experts [consul-
tants] and their work and the software industry benefits from greater experi-
ence in large and advanced government projects with advantage to its work
elsewhere at home and abroad.”73 The emphasis on the mutual benefits served
to underscore the rationality of the new policy—it seemed no one could lose
from it. As Fig. 4.3 shows, consultants were well placed to profit and maximise
from this opportunity; and did so. By 1976 when Arthur Andersen were
implementing the FIS, it was apparent that the civil service did not have the
skills necessary to undertake the work. The civil servants’ writings on the issue
betray a palpable sense of mild desperation. Though the project was ostensibly
a joint Treasury and Andersen effort, Robin Butler—who led the work as
Assistant Secretary in the Treasury, and during 1971–1972 had worked in the
Central Policy Review Staff (CPRS) and was a keen advocate of consultants—
wrote to colleagues on the subject of extending Andersen’s work and that the
164  A. E. Weiss

Information technology as a proportion of total MCA revenues

60%

50%

40%

30%

20%

10%

0%
1973 1974 1977 1978 1979 1986 1987 1992 1993 1994 1995 1996

Fig. 4.3  IT services by MCA member firms, 1973–1996 (selected years). (Author cal-
culations from MCA annual reports)

use of Treasury staff could help in a “substantial saving of money,” but high-
lighted that there were simply insufficient staff with the computer expertise
required to plausibly join the project.74 Whilst five of the seven Andersen con-
sultants had specialisms in “computer systems” or “data processing” (the other
two had expertise in “financial control systems”), Butler proposed “COBOL
courses” (a computer programming language) to train the civil servants before
joining the project.75 Whereas the civil service was proposing ad hoc training
courses for non-computer specialist staff, Andersen’s staff were experts in this
area: the gap in skills between the state and private sector was clear.
Such developments in the 1970s should be seen as a major factor in Britain’s
loss of state computerisation competence. These episodes are critical to the
history of the Operational Strategy, and coincided exactly when plans for the
Strategy first emerged.

Case Study: The Operational Strategy

Four accounts exist of the Operational Strategy, from a diverse array of sources:
the media; official reports; reflections by consultants; and academic studies of
IT. The input of professional historians is conspicuous by its absence. Of the
four accounts, the assessment from the popular press and media has been by
far the most critical. Through the Operational Strategy’s 14-year undertaking
the media was intermittently vocal in lambasting it for financial mismanage-
ment and a failure to deliver on promised outcomes. On a slow Christmas Eve
   Automating, 1980s: Arthur Andersen and the Operational Strategy  165

for news in 1983, when the Strategy was still in its early planning stages, The
Guardian was quick to mock the managerial “Blandspeak” of government
documents which described the Strategy.76 Thereafter, coverage was minimal,
save for describing the findings of the Public Accounts Committee (PAC) or
NAO reports on the Operational Strategy.77 However, at the turn of the mil-
lennium (with computers a particularly vogue topic in a media concerned
with the eventual non-appearance of the “Millennium Bug”), The Guardian
passed the final judgement on the Operational Strategy as being an “unsuc-
cessful attempt…[by] the social security department…to get automated”: in
short, a reflection of “computing that doesn’t compute.”78
The Guardian’s negative assessment was far from unique. The Times, in
1999, described the Strategy as “[one of a] catalogue of computer disasters”
and a few years earlier The Independent passed a similar verdict, judging it to
be “a great computer cock-up.”79 Even specialist periodicals such as Computer
Weekly failed to find much to praise in the Operational Strategy, as a 2006
review of government computer projects assessed it as a “disaster” (amongst
many others) and pointedly asked, “what happened to our [taxpayer
money]?”80
On the whole, media coverage focused on the costs of the Operational
Strategy, which were highlighted by its second major source of historical
accounts: official government reports. Two NAO reports in 1984 and 1989,
and one PAC report in 1989, oversaw progress of the project (the NAO was
established only in 1984 along with a suite of other Thatcherite drives to
modernise government, including the Derek Rayner scrutinies, Financial
Management Initiative, and four White Papers on the subject from 1981 to
1984).81 The 1984 NAO report offered little assessment of the overall Strategy,
bar providing the yardstick by which all future judgements would be based:
the financial implications of the Strategy. In the 1982 DHSS paper “Social
Security Operational Strategy: A Framework for the Future,” these were stated
as costs over 15 years of £700 million and projected savings over 20 years of
£1900 million.82 The 1988/9 PAC report, though recognising “that the
Operational Strategy is a large enterprise currently making significant prog-
ress,” voiced concerns about “management processes… substantial extra costs
[from]… earlier delays… [and the lack of ]…detailed post-implementation
reviews.”83 The 1989 NAO report similarly concluded that many of the
“delays and substantial cost increases…were due to [the] complexity of the
tasks undertaken and some factors outside of the Department’s control” but
that there were “weaknesses in the… fields of planning, monitoring and
resource utilisation. There were also significant weaknesses in financial man-
agement and control.”84 The NAO paid particular attention to the financial
166  A. E. Weiss

implications of the Strategy, concluding: “between 1982, when the first broad
estimates were made, and 1988, the estimated costs of the Strategy from com-
mencement to 1998-9 rose from £713 million to £1,749 million in real terms
(an increase of 145 per cent) while net savings fell from £915 million to £414
million in real terms (a fall of 55 per cent).”85 Despite acknowledging that the
Strategy would not be fully implemented until the early 1990s, it received no
subsequent government evaluations (bar a brief mention in a 1994/5 Social
Security Committee report that as a result of the Operational Strategy “cus-
tomer satisfaction is at an all-time high”).86 As a result, the official evaluation
of the Strategy—and that which the media therefore covered most keenly—
was one of caveated failure.
The third type of account is the smallest and most intriguing. In 1993, the
former deputy editor of The Sunday Times, Ivan Fallon, wrote The Paper Chase:
A Decade of Change at the DSS. The book chronicled the “heroic” feats of the
Operational Strategy; the challenge of delivering history’s “largest civil com-
puterisation project,” and the unlikely camaraderie formed between consul-
tants and civil servants.87 Written on the encouragement of Keith Burgess, the
Arthur Andersen partner-in-charge of the project, the book represents effec-
tively the “consultants’ view” of the work. Whilst the literary impact of the
book was relatively modest—brief reviews in the Guardian, The Sunday Times,
and The Herald and citations in two books and two articles—it is nonetheless
valuable for the analytical purposes of this chapter to compare and contrast
the extent to which real “partnership working” between consultants and civil
servants took place.88
Fourth, a number of academic studies of the Strategy have emerged with an
IT focus.89 All highlight the issue of undelivered financial benefits that the
NAO and PAC reports raised, whilst also adding concerns regarding the risks
of large-scale computer projects in government, such as a lack of “organisa-
tional [IT] expertise,” “consultancy bankruptcy,” and the “separation of
policy-­making and IT.”90 Notwithstanding, the overall assessment of the
Strategy is one of muted praise, as Helen Margetts (whose published doctor-
ate concerned itself with comparing government computerisation projects in
America and Britain) wrote: “it must be viewed as a considerable feat to have
installed machines in all offices… however, the DSS has not achieved any of
the other objectives it set itself.”91
These four accounts represent a spectrum of views on the Strategy: from
outright success (the consultant’s view) to relative success (IT academic view)
to relative failure (NAO and PAC) to outright failure (media). What is most
interesting from the perspective of the broader history of the state is the lack
of a fifth historiographical voice: histories of modern Britain. None of the
   Automating, 1980s: Arthur Andersen and the Operational Strategy  167

major works on the welfare state or civil service devote significant attention to
the Strategy. Only one contemporary, popular tome by two journalists con-
sidered what the Strategy meant for the state (Duncan Campbell and Steve
Connors’ On the Record ), but this was exclusively framed in terms of data
protection.92
This chapter was developed through consulting the now-archived original
Strategy plans, interviewing central characters in its formulation and develop-
ment, and analysing the Strategy’s impact on welfare recipients. In doing so,
throughout, this chapter is able to situate the Operational Strategy within the
broader history of 1980s Britain. At the end of the chapter, I propose where
on the aforementioned spectrum of assessment the Strategy most sensibly
should rest, by understanding better what “success” for the Strategy should
reasonably mean.

Chronology of the Operational Strategy

In 1959 the Ministry of Pensions and National Insurance (MPNI) became
the first state department to use mechanical computers to automate social
security tasks. The systems were developed in “batch mode,” meaning that
information was held in large computers in central offices—based in
Newcastle, North Fylde, and Livingstone—which could be retrieved only
through physically printing out the required knowledge and manually trans-
mitting it to whichever LO had raised a query. Information flowed into the
computers in the reverse direction, with paper reports sent to the central
offices where they were manually processed, usually overnight.93
By the mid-1950s, the social security budget constituted under £2 billion,
and the infrastructure of the MPNI proved sufficient to cater for the domi-
nant payments demanded of it: pensions. However, as the Welfare State, and
expectations of it, developed throughout the 1960s, more and more benefits
flowed from state to citizen. In 1961 the Conservatives implemented a gradu-
ated pensions scheme, soon modified by Labour in 1964; in 1966 national
assistance—claimed by two million people—was updated as supplementary
benefit; and in 1971, in response to fiscal retrenchment which accompanied
Sterling’s devaluation in 1967, Heath introduced family income ­supplements.94
Each additional benefit compounded administrative complexities. Social
security recipients could no longer easily be categorised into pensioners, sick,
or disabled; growing unemployment meant claimants could easily be young,
and receiving supplementary benefits, child benefits, and/or unemployment
benefits. The nature of the batch system infrastructure meant each claim was
168  A. E. Weiss

held on a benefit-by-benefit basis, and had to be claimed as such. Personal

data of individuals was held on average five times across different systems,
which were unwieldy, inefficient, and error-prone in administration.95 This
was hardly surprising given the sheer volumes of papers, tasks, and claimants
involved: 8000 internal non-standard and 12,000 external forms were required
to administer the entire social security operation for the state.96
In 1977, in the wake of Barbara Castle’s technically complex earnings-­
related pensions programme, the DHSS gave approval to commence the
Computerisation and Mechanisation of Local Office Tasks pilot scheme
(known as CAMELOT). The aim of the pilot was to automate the processing
of supplementary and short-term benefits in LOs. The pilot was to be in
Reading, the site of a previously failed project to computerise pension pay-
ments in LOs some ten years previous. The resources for the project were
government computer experts based in Newcastle, who were held in high
regard by their counterparts in London.97 Yet by 1981 it became apparent that
CAMELOT was not working. Interoperability of disparate systems was the
issue; the computer programmes written to connect the processes together
simply did not integrate. At the behest of Michael Partridge, Permanent
Secretary of the DHSS, consultants were called in to review progress on the
project and judged it “fundamentally flawed.”98 By December 1981, the proj-
ect was formally closed down, with a subsequent NAO report decreeing that
after £6 million of expenditure, “CAMELOT as…concept could not result in
a useful or operable system. The DHSS consider that the main cause of failure
lay in the quality of computer programming.”99
Three important points arose from these Reading pilots: first, in both
instances the DHSS refused to look to outside computer experts for advice
until the end of the project (Hoskyns computer consultants undertook a post-­
mortem of the first Reading pilot and others were called in to evaluate
CAMELOT); second, many of the Newcastle-based computer experts who
were brought down to Reading for the pilots left soon after their completion to
join private sector firms, thereby leading to a loss of internal computer expertise
in the state; and thirdly, the high-profile failure of CAMELOT—the project
was formally abandoned in December 1981—severely undermined faith in the
DHSS’ ability to meet the challenge of social security computerisation.100
By the early 1980s, social security accounted for 30 per cent of all public
sector expenditure and entailed 10 per cent of central government staff.
Pensioners constituted nearly nine million recipients, unemployment benefit
reached over one million, and those receiving basic supplementary numbered
nearly two million.101 As Fig. 4.4 shows, it required 85,000 DHSS employees
and 30,000 more from the Department of Employment to administer these
benefits. Of these, 65,500 rested in LOs and were clerical staff dealing with
   Automating, 1980s: Arthur Andersen and the Operational Strategy  169

DHSS HQ Key: (staff numbers)

London
Department for (2,000)
Employment HQ
London
(530)
Regional Offices
Reading and (4,000)
Regional Offices Newcastle North Fylde
Livingston
(900) Central Office Central Office
Computer Centre
(12,000) (2,900)
(500)

1,050
Unemployment 780 Local
Benefit Offices (including caller)
(UBOs) Offices
(27,300) (65,500)

Fig. 4.4  Social security organisational structure and staff numbers, October 1981.
(Derived from Geoffrey Otton, “Managing social security: Government as big busi-
ness”, International Social Security Review 27, no. 2, (1984): 165–168)

“millions of paper records held in rows of filing cabinets.” These staff were the
initial contact point with the DHSS for the general public. Around half the
staff calculated paid supplementary benefit, with the rest dealing with sick-
ness, invalidity, and other benefits. A total of 27,300 staff handled unemploy-
ment claims in UBOs, which were administered by 500 staff in computer
centres in Reading and Livingston which paid unemployment benefits. A total
of 12,000 staff were based in the Newcastle Central Office, recording contri-
butions for the whole working population whilst also paying retirement, wid-
ow’s pensions, and child benefits. And 2900 staff were based in the North
Fylde central office, catering for war pensions and various disablement bene-
fits.102 Yet, as Geoffrey Otton, Second Permanent Secretary at the DHSS,
described, the system and its “junior workforce who [are] not highly paid
could [barely] cope.” Of all the staff, “about 5,000 are employed simply to
move pieces of paper around offices and link up incoming mail with casepa-
pers…the missing casepaper is everyone’s nightmare.” Thus in the face of
increasing technical complexity, increasing error rates in benefits payments, a
recognition that opportunities in simplifying administration were being
opened up by technological developments, and—as explored in detail below—
public hostility towards DHSS officials increased as the economic situation in
Britain became more challenging, the department recommended exploring
ways of automating social security benefits. As Otton told the Royal Institute
for Public Administration in a 1983 lecture, it was his aim for “staff to be able
to use computers to do their calculations speedily and without error.”103
170  A. E. Weiss

A November 1980 Green Paper, with a foreword by the then Minister of

State, Patrick Jenkin, laid out the challenge: to computerise the operational
delivery of 34 distinct cash benefits, the pensions scheme, recasting the
earnings-­related contributory scheme and the means-tested supplementary
benefit scheme.104 An important feature of this challenge was to adopt a “whole
person” approach to benefits payment which would overcome the “tendency to
treat individuals in a compartmentalised, benefit-by-benefit way” and instead:

One claim would lead to the combined payment of all the benefits to which that
person was entitled; advice about all benefits would be available at a single
point; and information about changes of circumstances reported to one specific
point would be applied without further action by the beneficiary to all process-
ing points.105

Whilst the concept of “holism” on which the “whole person approach”

rested was nothing new (echoing education policy debates in the 1940s) in
terms of organisational structures it bore its antecedents in the “general sys-
tems theory” popularised in the 1960s by the Austrian-born biologist Karl
Ludwig von Bertalanffy.106 Intriguingly, the “whole person” approach was also
adopted in the US efforts to computerise its Social Security Administration
(SSA), which had commenced in 1978. As a panel of private sector organisa-
tions advised the SSA in 1979: “the [computerisation should] incorporate the
‘whole-person’ concept – the integration of all the records of each individual
client in order to make it possible to transact all current business and render
all applicable services to a client in a coherent manner.”107 It was almost cer-
tainly the SSA that the Operational Strategy Working group visited during
1977 to 1980. This was described as a “main activity” of the Working group
in the 1980 Green Paper: “visits have been made to the United States and
other countries to examine the technology which is or may become available
and to consider what may be learned from foreign experience in social ­security
operational planning.”108 This transatlantic importation of American manage-
ment ideas chimes with the work of Victoria de Grazia, which posits the
“Americanisation” of Britain through the medium of consumer-oriented capi-
talism culture, and this example builds on de Grazia’s thesis by suggesting this
“Americanisation” process was further enhanced by the transference of a
­particularly American-derived, management-oriented approach to the gover-
nance of capitalist societies too.109
During 1981 a newly formed “Operational Strategy Steering Committee”
met to outline the broad plan to meet the challenge set in the 1980 Green
Paper. With input from two consulting firms—Software Sciences and
   Automating, 1980s: Arthur Andersen and the Operational Strategy  171

Logica—the 1982 document “Social Security Operational Strategy: A

Framework for the Future” set out the three objectives of the programme:
reducing costs, improving quality, and increasing job satisfaction.110 In this
report, a high-level plan was articulated for how the current and future com-
puter structures would look, as shown in Fig. 4.5. This would involve inte-
grating the current siloes of the ILOs and UBOs, whilst also providing fast

Existing computer structure

North
Newcastle
Flyde

Overnight
tape-to-tape National Unemployment Benefit
DATALINK link System computers at Reading and
– overnight Livingston
telephone link
Permanent
telegraph link
Integrated Local Offices (ILOs) Unemployment Benefit Offices (UBOs)

Proposed computer structure

Central claimants
North
index and long- Newcastle
term benefits Flyde

Area
computers

Integrated Local Offices (ILOs) Unemployment Benefit Offices (UBOs)

Visual Display Units (VDUs)/micro-computers in local offices

Note: all telecommunications use fast telephone / digital links

Fig. 4.5  Existing and proposed computer structure for the Operational Strategy. (Derived
from Social Security Operational Strategy: A brief guide (London: DHSS, 1982), 9–11)
172  A. E. Weiss

telephone links between all units, replacing overnight data and postal links.
The key database holding all this information together would be the
Departmental Central Index—a record of all claimant details held in one
location: Newcastle.
The 1982 report in many respects also provided the proverbial rod by which
the Operational Strategy would subsequently be beaten. In estimating costs
(all at 1987 prices) of £713 million and total savings of £1628 million and a
subsequent net benefit of £915 million to the Exchequer (equivalent to staff
savings of 20,000 posts), the 1982 document ensured the Operational Strategy
always had a benchmark by which its effectiveness would be assessed.111 In
practical terms, it was expected that the programme would result in making
the benefits details of all claimants accessible online to all social security offices
(via the Departmental Central Index). This transformation of social security
processing was to be undertaken through 14 distinct but related projects,
known collectively as the “Operational Strategy” (the 1982 paper stressed the
need to break down programmes into manageable projects as an important
learning point from the failed CAMELOT programme). As detailed earlier,
the Strategy was based around the “whole person concept” approach to man-
aging benefits information—all benefits information would be focused
around the person, as opposed to the type of benefit. This would require the
installation of 33,000 visual display units in 450 LOs, all connected via a
three-tier structure of LOs, area centres, and the central database centre in
Newcastle.112 With good reason the NAO noted with some amazement the
size of the undertaking.113
Helen Margetts and Leslie Willcocks have usefully categorised the
Operational Strategy as broadly comprising three periods. A planning and
design phase, from 1982 until June 1985, during which point in 1984 the
PAC noted concern at the lack of progress. A readjustment phase from 1985
to 1987 when the government’s Social Security Act (1986) necessitated a
reworking of plans. And a “fast and furious” implementation phase from
1987 to 1991 when the Strategy finally came into effect. At all points, external
consultants were actively used in the design, planning, and implementation of
the Operational Strategy, and most extensively these consultants were from
Arthur Andersen. Whilst the relationship between state and consultants is the
primary focus of the analysis which follows, it is worth highlighting early on
that—similar to McKinsey & Company’s work on the NHS—Arthur
Andersen were only hired after the outline of the Operational Strategy (and its
stated aims and implied cost reduction) had been published in 1982.
Furthermore, Andersen were not the only consultants used—Computer
Sciences Corporation were hired to run the Local Office Project, a related but
   Automating, 1980s: Arthur Andersen and the Operational Strategy  173

separate project to the broader Operational Strategy. The use of consultants

was to prove particularly controversial during the Operational Strategy, in
large part due to the investigations of the PAC on the matter, which wryly
noted that the Operational Strategy spent £22 million on consultants alone
during the financial year 1987–1988—some five times the cost of equivalent
in-house resource.114 However, beyond the failure of CAMELOT in 1982, a
counterfactual scenario was never envisaged where the Operational Strategy
could have happened without external expertise.
At a December 1982 Operational Strategy Steering Committee seminar at
the Civil Service College, Sunningdale, it was agreed “to appoint a team of 4
or 5 management consultants who could give advice on the overall manage-
ment programme and act as a sounding board.”115 The consultants duly
appointed—via a competitive tender against four other consultancies—were
Arthur Andersen. Andersen had experience of state work before—their lead
partner on the project, Keith Burgess, worked on installing the Treasury’s FIS
during the mid-1970s—and the company had expertise in large-scale com-
puterisation work from projects with the British Overseas Airways Corporation
and the Worcester Bosch Group.116 Whilst the project started as relatively
small in nature for Andersen, as technical difficulties—outlined below—
became apparent, it quickly expanded. Whereas in January 1983 there were 5
Andersen consultants working on the Strategy, by 1984 there were 30, and at
its peak there were 350.117
Burgess, who had experience working for the NHS and Department of
Trade and Industry, as well as the Treasury, since joining Andersen in 1971,
predicted the Operational Strategy could be a large income generator for the
consultancy. Burgess was completing a project for the building company
Wates when the Operational Strategy appeared on his radar, and as he
recounted to the journalist Ivan Fallon, “I was in the market for a nice, new
interesting client or project.” Yet, as another Andersen consultant recalled
more candidly to Fallon: “One of the braver things that Keith did was that he
committed two partner for three years [on the project] … if you’re a partner-
ship of 16 partners, which we were, and you take an eighth of your partner-
ship away for a client who is only supporting another four people, then that’s
not very good economics. As it happened it wasn’t a problem, but that was the
bet that Keith made. And that was a special piece of thinking.”118
Competing against 14 consulting firms who had been approached by the
department, Andersen were informed of their success in the run-up to
Christmas in 1982.119 As the Operational Strategy Steering Committee was
informed: “The scale and nature of the strategy mean that firm central control
is essential to ensure consistent and economic development. The DHSS has,
174  A. E. Weiss

therefore, appointed a senior Director to manage the Operational Strategy

and the Departmental ADP resource both in support of existing observations
and the development of new ones. External consultants have been appointed
to key design and management posts, bringing into the strategy the skills and
experience necessary to undertake large interactive network projects.”120 Over
the course of the following eight years, the work of the consultants was broadly
focused on three areas: defining the project structure; creating the overall
technical architecture of the Operational Strategy; and managing, and at
times providing, technical input into the Strategy itself. In the first instance,
in early 1983 Burgess created a management plan which broke down the
strategy into discrete, mutually exclusive streams of work with goals, times-
cales, and teams staffed to deliver on those goals. In Burgess’ words, “we had
to define an enterprise-wide view – an enterprise architecture, so that each
component, when built, will be able to take its place in the jigsaw. [This jigsaw
approach was necessary] because what you might want to do is to take one
component out and replace it with new technology, but you can’t let the
whole system fall down if that is happening. We have to have a concept which
will allow replaceable bricks.”121 The surviving archival material on the Strategy
neatly demonstrates Burgess’ approach, which resulted in 14 interdependent,
but separate workstreams which ran in parallel to help deliver the Strategy.122
In the second main Andersen task, Mark Otway, a 34-year-old junior part-
ner with a degree in national sciences and chemical engineering from
Cambridge, led the way. In July 1983, Otway created the technical architec-
ture which would form the backbone of the Operational Strategy. It com-
prised of four novel components: a central index of all benefits claimants; a
series of national branch office systems; an open systems interconnection
(OSI) network to link the branches; and four data centres to underpin the
data storage of the architecture. Figure 4.5 summarises the approach Otway
set out, and delivered over the remainder of the project. At inception, the
technical architecture was a necessarily theoretical construct—no such
approach had been tried anywhere before. Whilst Otway was aware of the
work CSC had done for the Inland Revenue in the early 1980s, Andersen had
not been involved in the project. This was a new endeavour for both the civil
service and Andersen.123
In terms of managing and delivering the project, the only evidence available
to detail this is from those close to the Strategy interviewed by Fallon. From
this, the picture which emerges is one of close cooperation between consultants
and civil servants. Andersen’s role was to work alongside the department’s offi-
cials in delivering the workstreams; by 1988, for instance, the consultants had
over 200 staff working on Operational Strategy projects in Lytham, Newcastle,
   Automating, 1980s: Arthur Andersen and the Operational Strategy  175

Reading, Livingston, and London.124 As Eric Caines, Director of the Operational

Strategy, recalled to Fallon: “We were very suspicious of consultants and the
way they operated. Out in the field the idea was that consultants sat alongside
people who worked in the Department and transferred their skills to them, but
the responsibility lay with the person to whom the skills were being transferred.
The consultants took no direct responsibility for anything. But Andersens didn’t
ever do that. They felt some responsibility and stuck with it.” Similarly, Martin
Bankier, a computer specialist based at the department’s North Fylde site,
recalled: “[Andersen] brought in that increased feeling of: we work from half-
past eight in the morning till half-­past ten at night, if necessary, and that’s what
we’re paid for, which rubbed off onto all the civil servants. You’d find the civil
servants doing exactly the same. The motivation rubbed off.”125
By 1991, the Operational Strategy had broadly delivered its targeted com-
puterisation aims—35,000 terminals had been installed in 1000 LOs—
though questions abounded in the national media as to whether this
represented “value for money” and whether job satisfaction and quality had
really improved.126 Most problematically for the programme, however, was its
frequent downward revision of estimated cost savings and upward revision of
costs: the former dropping from £915 million in 1982 to £175 million in
1989, and the latter rising from £713 million in 1982 to an eye-watering £2.6
billion in 1989.127 Moreover, the Strategy largely failed in its aim for “whole
person care”; users still had to log in to different systems at terminals for dif-
ferent benefits.128 Despite these figures, in 1989 the Comptroller and Auditor
General summarised that the then Department of Social Security had made:

Significant progress in developing the Strategy to replace costly clerical systems

with [an] on-line computerised system. This is a large and innovative undertak-
ing at the forefront of new technology and information-technology ­management.
Although the NAO investigation has identified some delays and substantial cost
increases, many of these were due to the complexity of the tasks undertaken and
… factors outside the Department’s control.129

The transformation of the administration of social security in Britain did

not stop in 1991, the official “end” of the Operational Strategy. Three major
developments occurred beyond this point. First, social security was “spun off”
into an Executive Agency as a result of the 1989 Next Steps Initiative. This
deliberately distanced benefits delivery from social security policy.130 Second,
the Texas-based computer company Electronic Data Systems (EDS) took over
the entire Livingston Computer Centre in 1989. The rationale was based on
the high levels of industrial action in Livingston as a result of the Operational
176  A. E. Weiss

Strategy’s planned redundancies and as part of the Thatcher administration’s

desire to contract out non-core public services.131 As one Andersen consultant
put it, this “outsourcing” of benefits services “probably marked a watershed
moment” in the history of the public sector, as it heralded the first major out-
sourcing arrangement in the British state.132 David Butler, who headed the
British IT consultancy Butler Cox, recalled in 2011 that in this period “big
companies [in the private sector] were moving in the direction of outsourcing,
and there was a feeling that government had to catch up, or risk looking fool-
ish by comparison.” In Butler’s opinion, this led to an “uncritical acceptance
of huge systems without adequate piloting of [whether they were appropri-
ate].”133 And third, numerous other public services soon followed suit in com-
puterising their administrative functions; at roughly the same time as the
Strategy the Inland Revenue underwent computerisation with the support of
consultants from Computer Sciences Corporation, and child support, tax
credits, family subsidies, and others soon joined supported by a variety of
consultancies including Capgemini, Siemens, EDS, Accenture, and Arthur
Andersen too.134 These developments necessarily increased the extent to which
the public sector relied on the private sector for state reform.

Chalk and Cheese
Andersens and the [DHSS] computer guys were utter chalk and cheese. (Stephen
Hickey, Principal at DHSS during the Operational Strategy)135

This book has sought to put to bed the claims that British civil service was
for much of the twentieth century dominated by a closed class of civil ser-
vants, hostile to external influences.136 The history of the Operational Strategy
helps to explode this myth further. Not only was the type of civil servant who
worked on the Operational Strategy wholly different to the archetype of the
generalist, administrative class—the computer-focused civil servants who
worked on the Strategy were almost uniformly clerical and executive officer
class—they also formed strong bonds with the external consultants they
worked with.137 Importantly, for understanding the distinct “generations” of
consultancies which operated in the state during the twentieth century, the
“accounting generation” (of which Arthur Andersen were firmly a part of )
targeted relations with a distinct cohort of civil servant to those which the
“American generation” (such as McKinsey and the Boston Consulting Group)
focused their attentions on.
   Automating, 1980s: Arthur Andersen and the Operational Strategy  177

As demonstrated above, Stephen Hickey, who wrote the first Operational

Strategy Green Paper and worked on the Local Office Project and Family
Credit, reminisced, when the team of Arthur Andersen consultants went to
work in Blackpool on Family Credit, they were like “utter chalk and cheese”
with their civil servant counterparts:

culturally, most of the computer people in the civil service would have been
Clerical-class and have left school at 16 with O-levels or Executive-class and left
school at 18 with A-levels. The grading for computer people was quite junior
then – Grade 5 would have been very senior [for a computer person]. Andersen
were very different people… all 22 to 28 year-olds, very bright, many from
Oxbridge. The Androids [the civil service nickname for Andersens] would all go
skiing for the weekend with their plummy accents, which was a world apart
from the IT guys. But they won the credibility and respect of the civil service…
[I] was impressed by the hours they worked; always in early and [left] late. I
didn’t envy them at all.138

The recollection from the consultants’ side is similar. Ian Watmore, an

Andersen partner who worked on the Operational Strategy (and later became
Permanent Secretary at the Cabinet Office), reminisced in 2014:

everyone got along, even though there was a huge contrast in lifestyles – the
Andersen boys would drive up in their nice cars whereas the civil servants,
whenever they had an event to go to in Whitehall, would stay in horrible hotels.
[But] we realised they had fantastic people in the provinces who could do tech-
nology. We spotted the talent, which in Whitehall they had failed to see. We
recognised mutual skills and had great teamwork which led to lifelong friends
and colleagues.139

Watmore and Hickey’s quotes are significant for three reasons. First, they
back up the consultants’ historiographical view of the Strategy articulated in
Fallon’s The Paper Chase that the “Operational Strategy [story] is one of gov-
ernment and private sector working together, of friendships formed and ten-
sions and conflicts ironed out in everyday working circumstances.”140 In fact,
such were the warm relationships formed between Andersen and the civil
service that in 1990 the consultancy “held a… joint disco party… in recogni-
tion of the successful achievements of the Operational Strategy… for its staff
and those DSS staff, especially those in middle and junior grades, who had for
several years been working long hours and under great pressure developing
systems.” This description of the disco party and its existence was defended in
178  A. E. Weiss

the Commons by the Secretary of State for the Department of Social Security,
who noted there was “no cost to DSS.”141
Second, the comments underscore subtle nuances of the British state.
Major works on the civil service by Hennessey and Lowe, for example, focus
on the “elite” Under Secretary and higher echelons of the state.142 This class
undoubtedly were involved in the Strategy—for example, Geoffrey Otton,
Second Permanent Secretary at the DHSS, and Michael Partridge, Permanent
Secretary in the department for most of the Strategy, were Oxbridge-educated
career civil servants. Yet despite the fact that many Andersen consultants held
similar backgrounds to them (Mark Otway and Ian Watmore, both Andersen
Partners working on the Strategy, were Cambridge-educated), this was not the
class of civil servant which was targeted as potential clients by consultants in
the manner that McKinsey & Company and the other American generation
of consultancies operated, as described earlier in this book.143 Furthermore,
the “elite” class of civil servants had very little day-to-day involvement in actu-
ally implementing the Strategy. According to Mark Otway and Stephen
Hickey, Phil Dunn, who by the end of the Strategy was Deputy Chief
Executive of the Information Technology Service Agency (ITSA), “ultimately
really drove the Strategy” and was instrumental in its success.144 Yet Dunn was
anything but the archetypal Oxbridge-generalist civil servant, and instead
more closely resembled the “new technical middle class” of Britain outlined
by David Edgerton’s depiction of a “warfare state” Britain; Fallon describes
Dunn as “joining the DHSS straight from school [having] spent the first three
years of his career working in a social security local office…and an early adher-
ent of computers.”145 It therefore becomes apparent that much of the Strategy
was led by the historically neglected technical class of civil servants. As Mark
Otway recalled in 2014:

We didn’t really deal with the Secretary of State, Ministers, Permanent Secretaries
etc.…that wasn’t really our sphere of influence. We worked at most at the Deputy
Secretary, Under Secretary level; most of the people we worked with were Grade
4, 5 or junior IT people. They were predominantly non-Sisbys [civil service
fast-streamers].146

Third, Hickey and Watmore’s comments highlight the geographic disper-

sion of the Operational Strategy. As Fig. 4.4 demonstrates, over 113,000 staff
engaged in social security benefits delivery at the start of the Strategy were
based outside of Whitehall.147 The Strategy may have been initially conceived
within the confines of DHSS headquarters in 1982, but its detailed architec-
ture and implementation were generated in provinces seldom covered in state
   Automating, 1980s: Arthur Andersen and the Operational Strategy  179

histories: Reading, Newcastle, Livingston, Fylde.148 As Hickey recalled, whilst

characters such as Phil Dunn would travel to London to receive senior minis-
terial sign-off for large purchases or updates on progress, the real activity and
developments happened outside of the capital. In fact, the Strategy was driven
so much by the provinces that Dunn even once travelled down to Whitehall
to receive ministerial permission for a large hardware purchase that he had
already made, presumably confident in the knowledge that the centre would
rubber-stamp the decisions of the expertise held outside it.149
Whereas the 1974 NHS reorganisation is intriguing for those parts of the
state which it did not directly affect (Northern Ireland and Scotland), the
Operational Strategy impacted on all the United Kingdom’s jurisdictions. Not
only does this demonstrate distinct models of state reform in terms of geo-
graphical impact, it also gives weight to an important recent claim about the
nature of the British state. Patrick Joyce has argued that information and com-
munication helped connect the fissiparous modern British state together, with
particular relation to the impact of the mid-nineteenth-century Post Office.
The Strategy’s creation of the Departmental Central Index—which stored all
information about British claimants in one single database—arguably reflects
exactly the kind of connections Joyce is referring to, but over a century later,
suggesting a universality about the value of information channels in generat-
ing state power.150
The Index also provides a useful means of highlighting the applicability of
two major strands of thought regarding state and societal development to the
impact of consultancy on the state: Bruno Latour’s “actor-network-theory”
and James C.  Scott’s critique of “high modernism.” Using Latour’s model,
which seeks to understand how relationships between human and non-human
actors are formed in networks, one can see how consultants and civil servants
working on the Operational Strategy were the “material actors” who formed
networks around the “semiotic concept” of “automation.” Furthermore, the
tools and processes at play in these relationships—the overhead slides Andersen
consultants used to explain ideas and plans, the quantitative models under-
pinning the forecast costs and benefits, the written reports, and indeed the
Index and the technological infrastructure developed through the strategy—
enabled communication between these human “actants.” In Latour’s theory,
these formed the “hardware” supporting the network.151
For the anthropologist and political scientist James C. Scott, some of the
greatest disasters of the twentieth century are attributable to a “high modern-
ist” belief that state and society could be described, analysed, and improved
through “scientific laws.” According to Scott this “high modernism” was flawed
by its failure to appreciate local customs and practical knowledge—“metis,” as
180  A. E. Weiss

he terms it—which resulted in major central state social planning disasters.152

Whilst Scott’s focus is on primarily developing countries, the Soviet Union and
China, it is clear that the Index can also be viewed as an attempt by the British
state to categorise its citizens in a central database, in other words, in accor-
dance with “scientific laws.” What is novel and pertinent to Scott’s thesis here
is that whilst Scott’s focus is on the growth of “high modernist” thinking by
state actors, adoption of the scientific approach was also apparent in the work-
ings of non-state actors in this period: namely, management consultants.
Despite the “hardware” and the obvious joint working involved in the
Operational Strategy between consultants and the civil service, the legacy of
this partnership approach was weak. There was little skills transfer or retention
of the computing expertise acquired from the work. Stephen Hickey came top
of a computer course run by the Civil Service College and National Computer
Centre (which he undertook in a third of the recommended time), yet Hickey
nonetheless noted that such was the complexity of the computer systems that
though he ran part of the Local Office Project, he never fully understood the
computerised payday calculations being implemented by the Arthur Andersen
consultants and IT civil servants.153 Indeed, the civil service appeared to have
little interest in securing such computing skills for the future. A small number
of civil servants were singled out by Arthur Andersen as being instrumental in
the success of the Operational Strategy: Phil Dunn, Mike Fogden, Alan
Healey, and George Bardwell.154 Yet Dunn, Fogden, and Healey were eventu-
ally placed in Executive Agencies as Deputy Chief Executive of ITSA, Chief
Executive of the Employment Service, and Chief Executive of the Central
Communications and Telecommunications Agency, respectively (Bardwell
went on to advise foreign governments on IT). The significance of their roles
is their position in the wider state structure. By moving to Executive Agencies
which were concerned with “operational matters,” the IT expertise of these
individuals was lost from the central policy-making centre of Whitehall gener-
ally, and the Department of Social Security specifically, thereby divorcing IT
expertise from the heart of government.155 Furthermore, the move towards
“buying-in” consultancy expertise into government was enhanced when in
1989 the NAO endorsed the view that using external support (such as consul-
tants) for computerisation issues in the civil service “did not necessarily repre-
sent poor value for money”—despite costing five times more than an in-house
equivalent (deemed to be Senior Executive Officer grade)—because “higher
productivity [from the consultants] and [more] timely implementation of
projects [compared to using civil servants] might compensate for the addi-
tional cost.”156 Such a view effectively gave official endorsement to the forth-
coming rapid increase in the use of consultants in the 1990s.
   Automating, 1980s: Arthur Andersen and the Operational Strategy  181

The Turn from Full Employment

The fact is that when wealth is created, the social service expenditures go up and
have. There are some people who would rather have the social service benefits
lower than they are provided the whole range of incomes in our economy was
lower, and provided the whole standard of living was lower. We do not believe
that you are able to help the weaker people by taking away from the talents and
abilities of those who create the wealth. (Margaret Thatcher, Prime Minister,
June 8, 1987)157

During the late 1970s, as a result of the OPEC I oil crisis and escalating
inflation levels, Britain made a conscious about-turn in a major area of public
policy: sacrificing the pursuit of full employment for reducing inflation, as
Thatcher’s above comment alludes to.158 Thus in 1976 the then Labour Prime
Minister James Callaghan famously told the Party’s Annual Conference in
Blackpool: “we used to think that you could spend your way out of a recession
and increase employment by cutting taxes and boosting government spend-
ing. I tell you in all candour that that option no longer exists, and in so far as
it ever did exist, it only worked on each occasion since the war by injecting a
bigger dose of inflation into the economy, followed by a higher level of unem-
ployment as the next step.”159 By 1984, the Thatcher administration had
enthusiastically adopted this position, with Chancellor Nigel Lawson telling
an American journalist that “economically and politically, Britain can get
along with double-digit unemployment.”160 Just as the 1974 NHS
­reorganisation plans were endorsed by multiple political parties, there was
remarkable cross-party consensus in the turn from full employment.
Nonetheless, there is a distinction to be made between rhetoric and practice.
Whilst under Labour there were slight increases in unemployment—from 5.4
per cent in 1976 to 5.5 per cent in 1977—the increase was far more pro-
nounced under the Conservatives, as charted in Fig. 4.6.
As Thatcher’s earlier quote demonstrates, and despite contrary rhetoric
about “rolling back the frontiers of the state,” the inevitable consequence of
this change in policy would be greater pressure on the social security system.161
As Fig. 4.1 shows, unemployment benefits formed a significant proportion of
the social security budget, the fourth largest benefit by expenditure, with an
estimated 450,000 recipients in 1982/3. Additional strain consequently fell
on the Department for Employment’s unemployment benefits infrastructure.
However, an important side effect of the acceptance of higher unemployment
was also felt on other social security benefits. As fewer jobs became available,
employer bargaining power increased, and wages ­consequently dropped—a
 182  A. E. Weiss

30 Operational Strategy years % population below 60% median income 14

Unemployment rate

12
25
% of population below 60% median income

10
20

Unemployment rate (%)

8
15
6

10
4

5
2

0 0

Fig. 4.6  Unemployment rates and percentage of the population below 60 per cent
median income, 1976–2009. (Author analysis based on figures from Institute of Fiscal
Studies (from which the proportion of the population earning under 60 per cent
median income is used as a proxy indicator for poverty levels) with data from HM
Treasury and Office of National Statistics (for unemployment rates))

clear indication of this can be seen by the increase in low-income earners,

charted in Fig. 4.6. This shows the proportion of the population earning less
than 60 per cent of median incomes increased markedly during the 1980s.
With more individuals taking lower-paid jobs, greater numbers subsequently
qualified for other benefits, many of which were means-tested: from 1981 to
1982 alone there was a 21 per cent increase in supplementary benefits.162 The
enormous increase in social security expenditure—more than doubling dur-
ing the period of the Operational Strategy—is demonstrated in Fig. 4.7.
The Operational Strategy facilitated this major political and economic
development occurring without significant social upheaval. By the early
1980s, assaults on DHSS staff were common. In 1980, 215 assaults on DHSS
staff by claimants were reported, though it was suggested by a Principal at the
DHSS that “staff may not always report minor incidents” and a year earlier a
female visiting officer was “brutally murdered by the claimant she had visited
in order to deal with his request for an additional grant.” The same DHSS
Principal recalled being “chased from a Chinese restaurant by the angry pro-
prietor wielding a meat cleaver.”163 An academic study of unemployment in
Northern Ireland summarised the experience of DHSS clerks: “some claim-
ants are very difficult; some physically and verbally assault staff.”164 Though
the official documentation wrote that the aims of the Operational Strategy
   Automating, 1980s: Arthur Andersen and the Operational Strategy  183
Benefit expenditure (£m), real terms at 2014/15 constant prices
200000
Total neither contributory nor income-related
benefits (NC / NIR)
180000
Total income-related benefits (IR)
160000 Total contributory benefits (C)

140000

120000

100000

80000

60000

40000

20000

0
1948/49
1950/51
1952/53
1954/55
1956/57
1958/59
1960/61
1962/63
1964/65
1966/67
1968/69
1970/71
1972/73
1974/75
1976/77
1978/79
1980/81
1982/83
1984/85
1986/87
1988/89
1990/91
1992/93
1994/95
1996/97
1998/99
2000/01
2002/03
2004/05
2006/07
2008/09
2010/11
2012/13
2014/15
Fig. 4.7  UK benefits expenditure (£m), real terms at 2014/2015 constant prices.
(Author analysis based on data from the Department of Work and Pensions, last
accessed on April 3, 2014, data.gov.uk)

were to improve efficiency, claims accuracy, and staff experience, the real
“business imperative,” as one Andersen consultant put it, was much more
fundamental: keeping together the social fabric of the British state.165
Contextualisation here is vital to understanding the Strategy’s broader impor-
tance. This was a moment in British history when industrial action was com-
monplace—at their peak over 11 million working days were lost to strikes in
September 1983—and inhibited the ability of benefits recipients to claim
their payments as riots spread across Brixton, Birmingham, and Liverpool in
1981.166 A story the Director of the Operational Strategy, Eric Caines, told a
group of Andersen consultants demonstrates the point: “it was 1981 and a
local office in Brixton had been flooded and so they couldn’t make payments –
if money didn’t reach the office, the place would have gone up in flames.”167
Effective benefits payments, in other words, were seen as vital to preventing
civil disturbances.
Fascinatingly, no archives, autobiographies, or interviews to date suggest
that politicians explicitly shared this view (though future Cabinet Paper releases
may prove otherwise). This absence is potentially problematic, though the
rationale for this silence is likely to be twofold. First, politicians thought talking
about computerisation was an electorally unappealing topic. Thus whilst the
Secretary of State for Health and Social Security, Norman Fowler, suggested to
184  A. E. Weiss

the Chancellor of the Exchequer, Geoffrey Howe, that a reference to “a major

programme of investment to exploit new technology in the management of
social security benefits” be included in the 1983 Conservative Party election
manifesto, no such reference survived the final version.168 And second, com-
puterisation was in of itself unexciting—and often unintelligible—for politi-
cians, and so it was unlikely they would spend much time reflecting on its
possibilities. As Stephen Hickey suggested, “the [Operational Strategy] was
nothing politicians were interested in.”169 Yet what is important here is that
Eric Caines’ message clearly stuck with the consultants. Mark Otway believed
the Strategy was about “stopping riots” and part of Thatcher’s “reworking of
society”; Ian Watmore opined that the Strategy came about because: “Mrs
Thatcher’s economic medicine created a greater dependency on the welfare
state, which made it much harder to give a crap service if people were going to
be receiving benefits for long – so you needed to support people better.”170 This
highlights the complicated manner in which government policy is enacted;
originally forwarded by the elected politicians of the day, but interpreted and
refracted by the civil service and supporting consultants, often unbeknownst to
the political class.
The impact of the Operational Strategy in facilitating a new approach to
employment and welfare dependency was threefold. First, as shown in Fig. 4.7,
it allowed far greater numbers of individuals to receive state benefits. Whilst
the old paper-based systems may have coped with a higher volume of claim-
ants in functional terms (in other words, it might have been operationally
possible to run the system without computerisation), the long waiting times
for benefits (6.2 days for income support or 28.5 days for retirement pensions
before the Strategy commenced) and high error rates which led to assaults on
DHSS staff would have been unlikely to be sustainable.171 The Operational
Strategy, by cutting waiting times (income support dropped to three days’
waiting time by 1994, for instance) and error rates, and improving customer
satisfaction, thereby made greater welfare dependency possible.172 Second,
and relatedly, by making greater welfare dependency a technical possibility, it
also made it a political reality. Where Beveridge envisaged means-tested sup-
plementary benefits to cover only a small proportion of claimants, as Fig. 4.7
shows, by the end of the Operational Strategy the numbers were enormous;
creating large groups of citizens, in the words of Frank Field, a Labour MP,
“scarcely less dependent on state support than the unemployed.”173 Third, by
opening up the possibility of the computerisation of social security, the
Strategy facilitated the expansion of state power in terms of the volumes of
benefits it could provide to citizens; as child support, tax credits, family
­subsidies, and passport issuance would eventually be computerised too (with
   Automating, 1980s: Arthur Andersen and the Operational Strategy  185

Arthur Andersen advising on a number of these).174 Thus the ability of the

state to influence, change, and connect with the lives of ordinary citizens
increased concurrently.

The Hybrid State in Action

Who drove the Operational Strategy? The politicians supported it, but it was a
sub-set of civil servants and ourselves who really drove it. (Mark Otway, Partner,
Arthur Andersen)175

Beyond reacting to the scrutinising eye of the NAO and PAC, the
Operational Strategy evoked little interest from politicians. Though Thatcher
claimed it would be her government’s “biggest information technology proj-
ect for the next decade,” she made no reference of it in any speeches, inter-
views, or memoirs.176 Nor did her successor, John Major, include it in his
autobiography, despite it being completed under his premiership.177 As late as
1984, when the Strategy was in its seventh year of development, it had received
only one mention in Cabinet Papers. And this was only a minor reference to
how the Strategy could contribute to the government’s aim of reducing the
size of the public sector, in terms of absolute costs and headcount.178 In fact,
Thatcher’s most marked contribution to the Strategy appears to have been via
a note relaying her concerns regarding data protection sent to the Social
Security Operations Strategy Working Group. Here it was stated that: “the
PM is concerned about the proposal for a single reference number throughout
the social security system… there could be nothing to prevent some future
Government abrogating whatever safeguards were now built into such a sys-
tem.”179 As a side issue, whilst data confidentiality regarding the Strategy was
a public concern at the time it never became a significant political issue, argu-
ably reflecting the relatively high levels of trust Britons have towards the state
protecting their interests.180 This argument buttresses the works of Martin
Daunton and Christopher Andrew regarding public trust in tax collection
and national security in Britain, respectively.181
As Mark Otway’s quote above suggests, given the relative indifference of
elected politicians to the Operational Strategy, it is important to understand
which actors in the state infrastructure ultimately drove its work. Several
points of significance emerge as a result of this questioning. First, like the
1974 NHS reorganisation, there is clear continuity of thought across political
administrations regarding the Operational Strategy. The plans for it started in
1977 under Labour, yet were fully fleshed out under the Thatcher a­ dministration
186  A. E. Weiss

and completed under Major. As shown throughout this book, the extent to
which major state reforms are often of cross-party genesis is again apparent.
Second, it seems that, like the NHS reorganisation, the plans for the Strategy
were driven by the permanent civil service. Reacting to external pressures gen-
erated by changes to the benefits system and increased demand for its services,
the civil service led the development of the Operational Strategy, creating its
“blueprint” in the 1980 and 1982 working papers.182 Third, in terms of the
role external consultants played in the Strategy, it is apparent that they reacted
to the “blueprint” laid down for them. As Otway notes, “there was nothing
wrong with the ‘visioning study’ [the 1982 Green Paper] but it didn’t contain
anything on how it would be done… we [Andersen] led the management plan
and created a comprehensive architecture [to] make this all happen.”183 It is
clear, though, that consultants led in neither the policy-making process nor
the overall aims of the Strategy. Instead, they were concerned with devising a
management plan for delivering the Strategy, developing a “technical architec-
ture” to govern the system, and working on implementing it.184 This is signifi-
cant, because, at least in terms of the Operational Strategy, it contradicts many
assertions from academics and popular commentators that consultants are
embedded in the policy-making process and lead their clients instead of being
led by them.185
Yet in spite of the demarcation laid out above, there were inevitable nuances
to the relationships between politicians, civil servants, and consultants. What
the Operational Strategy shows is that it was ultimately the elected political
class who had the final say on the Strategy. Two instances highlight this fact.
First, despite Andersen’s insistence that the best computer to be used for the
DHSS system was the IBM System 360, political expedience meant that fol-
lowing heated debates in the Commons, the government opted for a contract
with the state-backed British company ICL rather than their American coun-
terparts, IBM.186 Failing to adopt the IBM computers, which Andersen had
experience of working with on a prior engagement with the British Overseas
Airways Corporation, in the eyes of the consultants, “was crazy… we walked
away from the mature technology… the whole of the Operational Strategy
would have been a lot easier if we had used IBM.” Yet the consultants were
powerless to prevent the decision because, in their own words, it “wasn’t in our
sphere of influence.”187 Second, Stephen Hickey recounts that one of the main
reasons he was sent to work on IT in Reading, away from the DHSS headquar-
ters, was because the view in the civil service was that by 1982 “social security
reform was done… from now on it would all be about ‘service delivery’.”188 Yet
in 1986 Norman Fowler introduced further social security reforms which
withdrew a number of universal benefits, a change of such scale that it neces-
   Automating, 1980s: Arthur Andersen and the Operational Strategy  187

sitated all senior civil servants sent to the provinces to head back to DHSS
headquarters.189 The civil service were kept in the dark on this plan for social
security reform and the consultants had to change timescales to implement
these unexpected policy changes, to suit the political agenda. It is therefore
clear that the multiple agents working in the state on the Operational Strategy
formed a “hybrid” state, which blurred public and private sector boundaries.
Yet within this “hybrid” there was a hierarchy. Politicians set the direction of
travel, civil servants drew up the high-level plans, and consultants worked on
implementing these plans, in partnership with the civil service.

Impact on the State
You heard the argument all the time: all you’re doing is destroying long-term,
good Civil Service jobs, hurting benefit recipients, reducing services, and you’re
bringing in all these high-paid consultants, who are just your disgusting private
sector friends. (John Moore, Secretary of State for Social Services, 1987–1988)190

This book aims to understand how the use of consultants has changed the
nature of the British state. Table 4.4, referring to our earlier typologies of state
power, briefly summarises—based on an assessment of the evidence gathered
from this chapter—the impact both the overall Operational Strategy, and the
specific use of Arthur Andersen, had on the state.
In terms of the extent to which the Strategy changed the coercive powers of
the state (i.e. the extent to which the state can put citizens under a state of
war), the impact of the work is negligible. The impact is more pronounced in
terms of fiscal powers though; the Strategy enabled the state to adopt a more
monetarist approach to economic management, and specifically one which
did not pursue full employment. Andersen were key in facilitating this process
as the state did not possess the technical capability to computerise its systems
without outside support, although it is important to consider the counterfac-

Table 4.4  Impact of the Operational Strategy on typologies of state power

Typology of state Impact of the overall Impact of the specific use of
power Operational Strategy Arthur Andersen
Coercive Nil Nil
Fiscal Medium Medium
Legal and normative High Medium
Functional and service High Medium
power
Administrative High Medium
188  A. E. Weiss

tual that another consulting firm could have done Andersen’s work (the work
was, after all, won through a competitive tender).191 This thereby minimises
somewhat the specific impact of Andersen. For legal and normative power
(i.e. how the state determines which actions are within or outside the rule of
law or how the state categorises a “benefits recipient”) the impact of the
Strategy is high. By making it significantly easier for the state to assess claim-
ants on a means-tested basis it enabled a more accurate (and larger) segmenta-
tion of the population to occur, separating the population—in the eyes of the
state, at least—between those who were benefits recipients and those who
were not. The function and service powers of the state were clearly also
changed in a major way, affecting the day-to-day interactions of DHSS clerks
and ordinary citizens. The greatest impact, however, can be seen in terms of
the administrative power of the state. The Strategy increased the state’s ability
to centralise information on citizens as well as simplifying the way in which it
operated. In capturing ever greater amounts of data on citizens it also allowed
more “performance reporting” on metrics such as benefits processing times.192
This thereby ushered in—to borrow the historian of science Theodore Porter’s
phrase—a move towards a state which prized “mechanical objectivity,” hold-
ing numbers and charts and graphs as the new means to communicate and
understand how and what the state does.193 As explored in subsequent chap-
ters, this state of “mechanical objectivity” has been one in which consultants
have thrived in.
Yet even more significant is the role of the Strategy in the development of
outsourcing in the public sector. The contracting of EDS to deliver the ben-
efits systems in Livingston was a result of the high levels of industrial action
brought about as a result of computerisation.194 And despite the hostility that
John Moore, quoted above, faced about this point, it is clear that those who
were against the private sector’s involvement in the state ultimately lost the
argument; as the next chapter describes, outsourcing became a huge source of
consultancy work during the 1990s and 2000s. A further point concerns the
specific role of Andersen in the Strategy. Despite being influential in the
development of the architecture and implementation of the computerisation
plans, ultimately, Andersen followed directions from the elected political and
unelected civil service officials as to what the aims of the Strategy were. As a
result, the consultants therefore facilitated changes to state power, but did not
directly cause them—a subtle, but noteworthy, distinction in terms of agency.
On the whole, the Operational Strategy therefore deserves a greater elevation
in importance into histories of how the British state has developed. As Jon
Agar has cogently argued, computerisation has long been neglected in such
histories.195 This is clearly flawed because it is the administrative elements of
   Automating, 1980s: Arthur Andersen and the Operational Strategy  189

the state which facilitate its existence, and the competence of these adminis-
trative elements, in part at least, generates the state’s legitimacy.
The final consideration of this chapter returns to the original question of
whose assessment of the Strategy is most apt. The verdict on the Strategy sits
somewhere between the consultants’ view of “outright success” and the
­academic judgement of “relative success.” Whilst the Strategy appeared to fall
down in terms of its initial costing (though the 1994/5 Social Security
Committee suggested it had delivered £3.3 billion in efficiency savings, pro-
viding a clear net benefit), the figures which the NAO and PAC judged the
Strategy by should be viewed with a proverbial pinch of salt.196 The numbers,
as Stephen Hickey points out, were intended for evaluating distinctive options
available at the time, not to assess the Strategy when it was finally completed
over ten years later and much changed.197 One should also remember that
some form of IT upgrading would have been necessary for the DHSS systems
by 1985 anyway, which would have involved large expense.198 And whilst the
“whole person” concept never fully materialised as part of the Strategy, wait-
ing times decreased and customer satisfaction increased.199 Astonishingly, the
IT architecture for the Strategy remained in place up until 2014, under the
auspices of the Department of Work and Pensions.200 This is no mean feat for
an undertaking which, in the opinion of the DHSS Second Permanent
Secretary, Geoffrey Otton, was equivalent in effort to putting man into
space.201 Thus the Operational Strategy should be viewed as a success in so far
as it computerised social security benefits, though its legacy, in terms of facili-
tating the introduction of outsourcing into the public sector, is much less
clear, and must be considered separately, in the following chapter.

Notes
1. House of Lords debate, Dec 19, 1988, vol 502 cc1125–6.
2. Cited in Beatrix Campbell, Wigan Pier Revisited: Poverty and Politics in the
Eighties (London: Virago, 1984), e-book.
3. Keith Butterfield, “Social Security Local Offices”, Management in Government
(London: HMSO, 1982) vols 37–8, 96.
4. New Society 62 (New Society Limited, 1982): 168.
5. Campbell, Wigan Pier Revisited quoting from a 1977 Daily Mail article.
6. Social Security Operational Strategy: A brief guide (London: DHSS, 1982),
2–3.
7. Geoffrey Otton, “Managing social security: Government as big business”,
International Social Security Review 27, no. 2 (1984): 161–166.
190  A. E. Weiss

8. Ann Widdecombe, House of Commons debate, April 15, 1991, vol 189 c9.
9. House of Commons Committee of Public Accounts, “Twenty-fourth
Report: Department of Social Security Operational Strategy” (London,
1989), v; “Government IT: What happened to our £25bn?,” Computer
Weekly, October 29, 2006.
10. Ibid.
11. “Life still tough for the IT consultants,” Financial Times, October 21, 1992;
author interview with Mark Otway, Managing Partner of Operational
Strategy, Andersen Consulting, 1982–2000, March 18, 2014.
12. Keith Burgess, interview with author in Sloane Square, London, March 9,
2011. See Appendix 1 for biography.
13. Financial Times, January 29, 1971.
14. Calculated by author from company returns in MCA: boxes 22, 23, and 24.
15. Paul E.  Ceruzzi, A History of Modern Computing, 2nd ed. (Cambridge,
Mass.: MIT Press, 2003), 32; McKenna, World’s Newest Profession, 21.
16. Edgar Jones, True and Fair: A History of Price Waterhouse (London: Hamish
Hamilton, 1995), 294.
17. Matthews et al., Priesthood of Industry, 104–05.
18. Ibid.
19. See Jones, True and Fair, 292; Mark Stevens, The Big Eight (New York:
Macmillan, 1981), 108.
20. Jones, True and Fair, 293. Fifty-five per cent of Price Waterhouse’s “manage-
ment consultancy” staff were qualified accountants in 1975; see TNA:
T374/97, “Career Summaries for the Consultants We Plan to Assign to the
Project.” Arthur Andersen to HM Treasury, April 9 1976, for a selection of
biographies of Arthur Andersen’s consultants.
21. Bank of England archives (hereafter BoE): E4/67. James Selwyn paper,
“Management Consultants in the Bank,” 1968.
22. MCA Annual Report, 1965; Kipping and Saint-Martin discuss Arthur Andersen’s
admission in “Between Regulation, Promotion and Consumption”, 454.
23. MCA Annual Report, 1965; MCA Annual Report, 1966.
24. Vic Forrington, correspondence with author.
25. Ibid.
26. “Another difficult time expected,” Financial Times, January 10, 1977.
27. Calculated by author from MCA: box 23.
28. “Where the consultants are going,” Financial Times, June 9, 1972.
29. “Another difficult time expected,” Financial Times, January 10, 1977.
30. Ibid.
31. Jones, True and Fair, 294.
32. Ibid., 292.
33. Quoted in Leonard Spacek, The Growth of Arthur Andersen & Co., 1928–
1973: An Oral History (New York: Garland, 1985), 162–63.
34. Jones, True and Fair, 296–316.
  Automating, 1980s: Arthur Andersen and the Operational Strategy  191

35. This point is also raised in Saint-Martin, Building the New Managerialist
State, 49.
36. Maurice W.  Kirby, Operational Research in War and Peace: The British
Experience from the 1930s 1970s (London: Imperial College Press, 2003), 3.
37. For more on this, see Kirby, Operational Research.
38. Keith Burgess, interview with author, March 9, 2011. For a biography of
David Kaye, see Appendix 1: Key characters by chapter.
39. Keith Burgess, interview with author, March 9, 2011.
40. Ibid.
41. Colin Thain and Maurice Wright, “Planning and controlling public expen-
diture in the UK, Part I: The Treasury’s Public Expenditure Survey,” Public
Administration, Vol 2 (1992), 6.
42. Maurice Wright, “Public Expenditure in Britain: The Crisis of Control,”
Public Administration, Vol 55, No 2 (1977), 143–150.
43. Thain and Wright, “Planning and controlling,” 1.
44. David Kaye, interview with author at Landmark Hotel, Marylebone,
London, November 11, 2011; the historian Rodney Lowe also ascribes the
conception of the FIS to Turner. See Lowe, The Official History of the British
Civil Service, 470, endnote 109.
45. Wright, “Public Expenditure in Britain,” 148.
46. TNA: T 374/97, “FIS: Proposal for Arthur Andersen and Company for
remaining stages.” F. E. R. Butler memo, April 8, 1976.
47. David Kaye, interview with author at Royal London Homeopathic Hospital
on February 14, 2013.
48. Kirby, Operational Research in War and Peace, 383.
49. Arjand A. Assad and Saul I. Gass, Profiles in Operations Research: Pioneers
and Innovators (New York: Springer, 2011), 485–6.
50. Kirby, Operational Research in War and Peace, 346.
51. Ibid., 384.
52. Tisdall, Agents of Change, 50.
53. Kipping, “Trapped in their wave”, 32.
54. “Idealism was not enough”, Financial Times, June 25, 1984.
55. Kipping, “Alternative Pathways of Change in Professional Service Firms:
The Case of Management Consulting,” 792.
56. Churchill Archives Centre: MISC 84.1. Sir John Herbecq papers, “Memoir,”
224. Quoted in Lowe, Civil Service, 514 n.124.
57. Richard Wilson, interview with author at C. Hoare & Co., March 6, 2014.
See Appendix 1 for biography.
58. TNA: HN 1/22. “Computers in central government – report.” November 7,
1969.
59. Quoted in Helen Margetts, Information Technology and Central Government:
Britain & America (London: Routledge, 1999), 25.
60. Quoted in ibid., 34.
192  A. E. Weiss

61. Quoted in Jon Agar, The Government Machine: A Revolutionary History of the
Computer (Cambridge, Mass.: MIT Press, 2003), 331.
62. Brech et al., Lyndall Urwick, 213.
63. For computer installation figures see Agar, The Government Machine, 293;
for accounts of these official visits see ibid., 315; Agar’s describes this “retreat”
in ibid., 339.
64. Agar, The Government Machine, 6.
65. Margetts, Information Technology and Central Government: Britain &
America, 2.
66. Cited in ibid., 21.
67. Atkinson quote cited in TNA: HN 1/22: “Computers in Central
Government – Ten Years Ahead; some observations on the report.” F. Clive
de Paula, September 1969, 1–8. See Appendix 1 for biography.
68. Lowe, The Official History of the British Civil Service, 340–46.
69. TNA: HN 1/22. “Computers in Central Government – Ten Years Ahead.”
September 1968, 7–8.
70. Ibid.
71. Ibid., 6–8.
72. Civil Service Department, Central Computer Agency, Code of Practice for
the use of Computer Consultants and Software Houses by Government
Departments. (London: HMSO, 1973).
73. Ibid., 2.
74. Lowe, The Official History of the British Civil Service, 227; TNA: T 374/97,
“FIS: Proposal for Arthur Andersen and Company for remaining stages.”
F. E. R. Butler memo, April 8, 1976, 1–3.
75. Ibid.; TNA: T 374/97, “Career summaries for the consultants we plan to
assign to the project.” Arthur Andersen & Co. memo to M. P. Brown, April
9, 1976.
76. “Whitehall’s blandishments win war of the words,” The Guardian, December
24, 1983.
77. “High-tech benefits cost DSS £1 billion more,” The Guardian, July 6, 1989.
78. “Computing that doesn’t compute,” The Guardian, December 22, 1999.
79. “New computers are a passport to chaos,” The Times, July 3, 1999; “Great
computer cock-ups,” The Independent, January 24, 1997.
80. “Government IT: What happened to our £25bn?,” Computer Weekly,
October 29, 2006.
81. For a consultant’s view on the early years of the Thatcher administration’s
drive to modernise government see Colin Sharman, Partner at Peat,
Marwick, Mitchell & Co., “Value for money auditing in the Public Sector”,
Dutch-­British Workshop, Amsterdam, September 20–21, 1986.
82. NAO, Report by the Comptroller and Auditor General: Administrative
Computing in Government Departments (London: HMSO, 1984), 5.
83. Public Accounts Committee Report 1988/9, vii.
  Automating, 1980s: Arthur Andersen and the Operational Strategy  193

84. National Audit Office Report by the Comptroller and Auditor General,
Department of Social Security: Operational Strategy (London: House of
Commons, 1989), 5–6.
85. Ibid., 2.
86. Ibid., 1; “Social Security Committee: Fifth Report 1994/5”, (London:
House of Commons, 1995), 97.
87. Fallon, The Paper Chase: A Decade of Change at the DSS.
88. Ibid; “Security alert,” The Sunday Times, August 1, 1993; “Bookbytes,” The
Guardian, July 29, 1993; “Hail to Britain’s very own SS,” The Herald, July
24, 1993; author Google Scholar search, last accessed 3rd April 2014.
89. Margetts, Information Technology and Central Government; Helen Margetts
and Leslie Willcocks, “Information Technology in Public Services: Disaster
Faster?”, Public Money & Management 13, no.2, 1993; P.H.A. Frissen (ed.),
European Public Administration and Informatisation: A comparative research
project into policies, systems, infrastructures and projects (Amsterdam: IOS
Press, 1992); M. O’Higgins, “Computerising the Social Security System: An
Operational Strategy in Lieu of a Policy Strategy” in D. Pitt and B. Smith
(eds.), The Computer Revolution in Public Administration (Brighton: Edward
Elgar, 1984); Agar, The Government Machine.
90. Helen Margetts and Leslie Willcocks, “Information Technology in Public
Services: Disaster Faster?”, Public Money & Management 13, no. 2 (1993):
49–56.
91. Margetts, Information Technology and Central Government: Britain &
America, 52.
92. See Nicholas Timmins, The Five Giants: A Biography of the Welfare State
(London: HarperCollins, 1995); The Welfare State in Britain since 1945
(Basingstoke: Macmillan, 1993); Lowe, The Official History of the British
Civil Service; The Welfare State in Britain since 1945 (Basingstoke: Macmillan,
1993); Hennessy, Whitehall.. An exception is Duncan Campbell and Steve
Connor, On the Record: Surveillance, Computers and Privacy: The inside Story
(London: Michael Joseph, 1986), 89.
93. Helen Margetts, “The Computerisation of Social Security: The Way Forward
or a Step Backwards?”, Public Administration 69 (1991): 326; Fallon, The
Paper Chase, 2.
94. Ibid., 1–5.
95. Michael O’Higgins, “Computerizing the Social Security System: An
Operational Strategy in lieu of a Policy Strategy?” Public Administration 62
(Summer 1984): 202.
96. Fallon, The Paper Chase, 9; Agar, The Government Machine, 374.
97. Stephen Hickey, interview with author, Wimbledon, London, February 27,
2014. See Appendix 1 for biography.
98. Fallon, The Paper Chase, 18–20.
194  A. E. Weiss

99. NAO, Report by the Comptroller and Auditor General: Administrative

Computing in Government Departments (London: HMSO, 1984), 5.
100. Fallon, The Paper Chase, 10; Agar, The Government Machine, 374–75.
101. Fallon, The Paper Chase, 17; Agar, The Government Machine, 374.
102. Social Security Operational Strategy: A brief guide (London: DHSS, 1982), 3.
103. Geoffrey Otton, “Managing social security: Government as big business”,
International Social Security Review 27, no. 2, (1984): 165–168.
104. Fallon, The Paper Chase, 18; Department of Health and Social Security, A
Strategy for Social Security Operations (London: HMSO, 1980).
105. A Strategy for Social Security Operations (London: DHSS, 1982), 7.
106. See, for instance, House of Lords debate, February 17, 1942, vol 121 cc852–
66 where the Lord Archbishop of Canterbury stressed the need to consider
the “development of the whole personality”; Ludwig von Bertalanffy, General
System Theory: Foundations, Development, Applications (London: Allen Lane,
1968).
107. The National Research Council, Second Review of a New Data Management
System for the Social Security Administration (Washington: National Academy
of Sciences, 1979).
108. A Strategy for Social Security Operations, 1.
109. De Grazia, Irresistible Empire, 458–80.
110. Margetts, “Computerisation”, 327.
111. Ibid., 327.
112. Agar, The Government Machine, 375.
113. The project was claimed to be the “largest computerisation project in
Europe” in NAO, Report by the Comptroller and Auditor General. Department
of Social Security Operational Strategy (London: HMSO, 1989), 1.
114. Helen Margetts and Leslie Willcocks, “Information Technology in Public
Services: Disaster Faster?”, 52.
115. Social Security Operational Strategy: Sunningdale Seminar December 1982
Report (London: DHSS, 1982), 5.
116. See Table 17; Mark Otway, interview with author at Institute of Directors,
Pall Mall, London, March 18, 2014. See Appendix 1 for biography.
117. Ibid.
118. Fallon, Paper Chase, 34–35.
119. Ibid., 35.
120. TNA: BN 13/297. “The Social Security Operational Strategy: Background
working papers.” May 1984.
121. Fallon, Paper Chase, 41.
122. See, for instance, TNA: BN 120/62/1, “Operational Strategy Directorate –
Progress Report  – April 1985.” May 10, 1985; or TNA: BN 136/32,
“Critical Strategy Projects – A Summary of Key Milestones.” March 1988.
123. Fallon, Paper Chase, 46.
124. Ibid., 103.
   Automating, 1980s: Arthur Andersen and the Operational Strategy  195

125. Ibid., 67–69.

126. For a sense of comparison of scale, Jon Agar has suggested that 25 years earlier
there were 1000 computer terminals in all of Britain in Agar, The Government
Machine, 331; for critiques, see, for instance, “Great computer cock-ups,” The
Independent, January 24, 1997; Margetts, “Computerisation”, 332.
127. Margetts and Willcocks, “Disaster Faster”, 50–1.
128. Ian Watmore, interview with author, February 12, 2014.
129. NAO, Report by the Comptroller and Auditor General. Department of Social
Security Operational Strategy (London: HMSO, 1989), 5.
130. Margetts, Information Technology and Central Government, 64.
131. Ibid., 61.
132. Mark Otway, interview with author, March 18, 2014.
133. David Butler, telephone interview with author, April 1, 2011.
134. “Government IT; What happened to our £25bn?,” Computer Weekly,
October 29, 2006.
135. Stephen Hickey, interview with author, February 27, 2014.
136. See, for instance, Sampson, The Essential Anatomy of Britain, 37; Heclo and
Wildavsky, The Private Government of Public Money, 1–3.
137. Interview with Stephen Hickey; for more on friendships formed, see Fallon,
The Paper Chase, xiv.
138. Stephen Hickey, interview with author, February 27, 2014.
139. Ian Watmore, interview with author, February 12, 2014.
140. Fallon, The Paper Chase, xiv.
141. House of Commons debate, March 12, 1990, vol 169 c73w. “Arthur
Andersen roll-out party.” The venue for this party is, sadly, unknown.
142. See, for instance, Lowe, The Official History of the British Civil Service and
Hennessy, Whitehall.
143. Who’s Who, “Geoffrey Otton”; ibid., “Michael Partridge”; Mark Otway,
interview with author, March 18, 2014; Ian Watmore, interview with
author, February 12, 2014.
144. Author interview with Mark Otway, March 18, 2014; Author interview
with Stephen Hickey; Dunn’s role is also described in Fallon, The Paper
Chase, 53.
145. Harry Hopkins, The New Look: A Social History of the Forties and Fifties in
Britain (London: Secker & Warburg, 1963), 159; Fallon, The Paper Chase, 53.
146. Mark Otway, interview with author, March 18, 2014.
147. Social Security Operational Strategy: A brief guide (London: DHSS, 1982), 3.
148. Ibid.
149. Stephen Hickey, interview with author, February 27, 2014.
150. Joyce, The State of Freedom, 20; Christopher Hood has made similar claims
about “nodality” being a vital tool of government policy – see Christopher
Hood and Helen Margetts, The Tools of Government in the Digital Age
(Basingstoke: Palgrave Macmillan, 2007), 3.
196  A. E. Weiss

151. See in particular: Bruno Latour, Pandora’s Hope: Essays on the Reality of
Science Studies (Cambridge, Mass.; London: Harvard University Press,
1999); Reassembling the Social: An Introduction to Actor-Network-Theory
(Oxford: Oxford University Press, 2005).
152. James C. Scott, Seeing Like A State (London: Yale University Press, 1999),
1–8.
153. Stephen Hickey, interview with author, February 27, 2014.
154. Fallon, The Paper Chase, 6; author interview with Mark Otway.
155. Phil Dunn’s subsequent career is mentioned in ibid., 114–15; Mike Fogden’s
career is covered in his obituary in Public Finance, October 23, 2009,
accessed November 12, 2014, http://opinion.publicfinance.co.uk/2009/10/
obituary-mike-fogden-cb/; Alan Healey’s post-DSS career is on his LinkedIn
profile, accessed November 12, 2014, http://uk.linkedin.com/pub/alan-
healey/25/257/614; George Bardwell’s consultancy activities are recorded in
“Support to Public Administration Reform Project ‘Support to the Civil
Service Office’ (Slovakia)”, PAi report, 2001; for more on Executive Agencies,
see Department of Social Security, Agency Study Report (London: HMSO,
1989), 1–2.
156. NAO, Department of Social Security: Operational Strategy, 20.
157. Margaret Thatcher Foundation, “General Election Press Conference,” June
8, 1987.
158. Middleton, The British Economy since 1945, 50.
159. Labour Party, Annual Conference Report (London: Labour Party, 1976), 188.
160. John Campbell, Margaret Thatcher: Grocer’s Daughter to Iron Lady, Rev. ed.
(London: Vintage Books, 2009), 235.
161. Margaret Thatcher Foundation, “Speech to the College of Europe”,
September 20, 1988.
162. House of Commons debate, Social Security Offices, December 1, 1982, vol
33 cc267–8.
163. Keith Butterfield, Management in Government, 1982, vol 37–8, 92–3.
164. Leo Howe, Being Unemployed in Northern Ireland: An Ethnographic Study
(Cambridge: Cambridge University Press, 1990), 124.
165. DHSS, A Strategy for Social Security Operations (London: Department of
Health & Social Security, 1980), 1; Mark Otway, interview with author,
March 18, 2014.
166. Author analysis based on Office of National Statistics data. Available in
“How Britain changed under Margaret Thatcher. In 15 charts,” The
Guardian, April 8, 2013; Campbell, Margaret Thatcher: Grocer’s Daughter to
Iron Lady, 177.
167. Mark Otway, interview with author, March 18, 2014.
168. See Churchill Archives: THCR 1/11/7 f62. Norman Fowler’s memo to
Geoffrey Howe, “1983 Manifesto Draft”, March 23, 1983; and compare
with the eventual manifesto, “1983 Conservative Party General Election
   Automating, 1980s: Arthur Andersen and the Operational Strategy  197

Manifesto: The Challenge of Our Times”, accessed November 12, 2014,

http://www.conservative-party.net/manifestos/1983/1983-conservative-
manifesto.shtml
169. Stephen Hickey, interview with author, February 27, 2014.
170. Mark Otway, interview with author, March 18, 2014; Ian Watmore, inter-
view with author, February 12, 2014.
171. HoC debate, April 15, 1991, vol 189 c9; error rates noted in Margetts,
Information Technology and Central Government: Britain & America, 53.
172. “House of Commons Social Security Committee: Fifth Report”, HoC 382,
1994/5, 97.
173. Geoffrey Otton, “Managing social security: Government as big business”,
161; Frank Field, The Conscript Army: A Study of Britain’s Unemployed
(London: Routledge and Kegan Paul, 1977), 63.
174. “Government IT”, Computer Weekly; “20,000 jobs may go in tax office
reform plan,” Financial Times, November 9, 1991.
175. Mark Otway, interview with author, March 18, 2014.
176. Otton, “Managing social security”, 170; author search of Margaret Thatcher
Foundation archive, last accessed on April 3, 2014; Margaret Thatcher, The
Path to Power (London: HarperCollins, 1995); Margaret Thatcher, The
Downing Street Years (London: HarperCollins, 1993).
177. John Roy Major, John Major: The Autobiography (London: HarperCollins,
1999).
178. TNA: CAB 129/215/15. “Civil service numbers after 1984.” Memo by
Chief Secretary, Treasury. December 8, 1982.
179. TNA: PIN 42/118. “Social Security Operations Strategy Working Group.”
Memo: Mike Patterson to Dan Brereton, DHSS, October 13, 1980.
180. For evidence of public concern, see “The threads going through the laby-
rinth,” The Guardian, November 9, 1987.
181. M.  J. Daunton, Just Taxes: The Politics of Taxation in Britain, 1914–1979
(Cambridge: Cambridge University Press, 2002); Christopher M. Andrew,
The Defence of the Realm: The Authorized History of MI5 (London: Penguin,
2010).
182. A Strategy for Social Security Operations (London: HMSO, 1980); Social
Security Operational Strategy: A Framework for the Future (London: HMSO,
1982).
183. Mark Otway, interview with author, March 18, 2014.
184. The main output of the architecture development work is a technical docu-
ment detailing the system and user interface linking the DHSS’ information
systems. From Mark Otway “Systems and technical Architecture Overview”
(London: DHSS, 1985).
185. See, for instance, Alfred Kieser cited in Kipping and Engwall, Management
Consulting, 14; Craig and Brooks, Plundering the Public Sector.
198  A. E. Weiss

186. For more on the debates, see: HoC debate, April 6, 1981, vol 2 cc746–58;
HoC debate, November 27, 1981, vol 13  cc1097–151. The decision was
announced to adopt a “single tender [non-competitive] with ICL” on
September 11, 1985. See TNA: BN136/1. “Management of LOP”.
September 4, 1985.
187. Mark Otway, interview with author, March 18, 2014.
188. Stephen Hickey, interview with author, February 27, 2014.
189. Lowe, The Welfare State in Britain since 1945, 315.
190. Quoted in Fallon, The Paper Chase, 140.
191. Mark Otway, interview with author, March 18, 2014.
192. See, for instance, Michael Partridge (Permanent Secretary, DSS) and Michael
Bichard’s (Chief Executive of the Benefits Agency) testimonies to the 1994–
1995 Committee of Public Accounts on “Improving social services in
London: the provision of services to customers” (London: House of
Commons, 1995), 1–16, for an exemplar in the use of statistics to demon-
strate performance of a given government organisation.
193. Theodore M. Porter, Trust in Numbers: The Pursuit of Objectivity in Science
and Public Life (Princeton, N.J.; Chichester: Princeton University Press,
1995), 5–7; for more on the obvious problem posed regarding the lack of
objectivity in numbers which are perceived to be objective, see J.  Adam
Tooze, Statistics and the German State, 1900–1945: The Making of Modern
Economic Knowledge (Cambridge: Cambridge University Press, 2001), 3.
194. “Computing that doesn’t compute,” The Guardian, December 12, 1999.
195. Agar, The Government Machine, 1.
196. Social Security Committee: Fifth Report 1994/5 (London: House of Commons,
1995), 60.
197. Stephen Hickey, interview with author, February 27, 2014.
198. “A Strategy for Social Security Operations”, 3.
199. Social Security Committee: Fifth Report 1994/5 (London: House of Commons,
1995), 97.
200. Ian Watmore, interview with author, February 12, 2014.
201. The Times, February 16, 1995.
 5
Delivering, 1990s–2000s

It has been a remarkable and historic victory for my party but I am in no doubt
at all as to what it means. It is a mandate for reform…and it is also very clearly
an instruction to deliver. I have learnt many things over the past four years as
prime minister…above all else I have learnt of the importance of establishing
the clear priorities of government, of setting them out clearly for people and
then focusing on them relentlessly whatever events may come and go. (Tony
Blair, on his second general election victory, June 8, 20011)

In October 2013, “GOD”—recently departed from the civil service—

became a consultant. Gus O’Donnell (commonly referred to by his initials in
the media, and by his colleagues), hitherto the senior most civil servant in
Britain as Head of the Home Civil Service and Cabinet Secretary from 2005
to 2011, became chair of Frontier Economics, an economic consultancy.2
O’Donnell was far from alone in this period in making the transition from
the public to private sector. James Purnell, a former Secretary of State under
New Labour, joined the BCG in 2010.3 And Michael Barber, who led Tony
Blair’s Prime Minister’s Delivery Unit (PMDU) from 2001 to 2005, joined
McKinsey & Company as a senior partner in 2007.4 The movement of these
individuals demonstrates how close the workings of the state and consultan-
cies had become by the early twenty-first century.
This easy transmission of public expertise into private sector practice and
vice versa characterised a historically distinctive era of the British state.5 By the
2000s, the state’s use of consultancies had increased dramatically (see
Table 5.1) from its emergence as a formalised practice in the 1960s.

© The Author(s) 2019 199

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3_5
 200 
A. E. Weiss

Table 5.1  State work income for MCA membersa

State area 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Central government 93 113 91 82 n/a n/a n/a n/a n/a 392 932 1011 544 568 568
Nationalised industries 9 28 10 9 n/a n/a n/a n/a n/a 0 0 0 0 0 0
Other public bodies (inc health service) 85 73 43 39 n/a n/a n/a n/a n/a 16 57 221 999 425 584
Local government 20 32 20 14 n/a n/a n/a n/a n/a 59 53 229 267 237 177
International agencies 2 0 14 11 n/a n/a n/a n/a n/a 11 1 13 17 13 2
European Commission 0 0 4 7 n/a n/a n/a n/a n/a 5 1 0 12 12 0
Defence 0 0 0 0 n/a n/a n/a n/a n/a 37 73 144 202 126 129
Other 0 0 0 0 n/a n/a n/a n/a n/a 7 10 183 168 233 274
Total UK state work (£m) 209 246 182 162 418 399 471 332 509 527 1127 1801 2209 1614 1734
a
MCA annual reports
   Delivering, 1990s–2000s  201

In 2005, annual expenditure on consultants peaked at around £4.5 billion

(at 2013 prices)—over eight times ten years earlier. The impact of consultants
on the nature of the British state became more than just a balance sheet figure,
however. In the light of a deliberate policy to curb the state’s use of consul-
tants by the Conservative-Liberal Democrat coalition government of
2010–2015, a major rail franchise tender was withdrawn due to error in 2012.
The main explanation given by the Department for Transport’s Permanent
Secretary for the failure to successfully run the contract competition was a
lack of in-house contracting skills which, were it not for the moratorium on
consultants, would have been covered by external advisers.6 Consultants had
become essential to the workings of the public sector; in the process, forming
a “hybrid state,” developed through discourses in the “governmental sphere”—
where public and private sector agents debated, discussed, and worked in tan-
dem to deliver public services. This chapter traces this development in the
local and central parts of the state from the early 1990s to mid-2010s—with
a particular focus on Blair’s second term and his “instruction to deliver,” as his
above quote indicates—but first commences with an analysis of the existing
views on this period.
Five highly distinct types of sources have charted the extent to which man-
agement consultants have been responsible for the development of this hybrid
state. Accounts in the popular media have frequently stressed the “swindling”
nature of management consultancy, with headlines chronicling the “great
management consultancy scam,” and the “plundering” nature of consultants’
work.7 From this vantage point (echoed by several politicians), consultants
were portrayed as “making money out of suckers.”8 Periodicals such as Private
Eye devoted important print sections to stories about consultants’ public sec-
tor work; the moniker “Crapita” for the outsourcing company Capita entered
the public lexicon owing to the publication.9 In short, consultants were per-
ceived to be abusing their role in delivering state services for profit gain. In
large part, media coverage was fuelled by sober, but nonetheless attention-­
grabbing, publications from official state investigative reports on the state’s
use of consultants such as the Prime Minister’s Efficiency Unit (1995), local
government Audit Commission (1994), NAO (2006, 2010), House of
Commons Health Committee (2009), and Public Accounts Committee
(2010).10 Whilst the analysis in these publications was broadly sensible—the
overriding conclusion being that public sector bodies hired consultants when
they lacked either resources or expertise—it was the financial figures which
elicited media interest. The £2.8 billion spent on consultants may not be
much in the context of a £700 billion public sector (2005–2006 figures)—
indeed John Major reflected that the money his government spent on
202  A. E. Weiss

c­ onsultants was “to be honest, nothing – it was minor.”11 Yet reframed by the
media, something Tony Blair reflected on in his memoirs, such sums can seem
substantial.12
Political memoirs are intriguing as a source for their near-silence on the
issue of consultancy. Major, whose governments witnessed one of the biggest
ever increases in the use of consultants, made no mention of them at all.13
Tony Blair acknowledged that McKinsey have “highly qualified young peo-
ple,” yet—despite his government becoming known for welcoming the
“McKinsey mafia” in Whitehall—did not pursue the topic further.14 Similarly
the memoirs of various high-profile Cabinet figures, whose departments
extensively used consultants, do not address the matter.15
A growing, largely social sciences-based, literature has, however, emerged
regarding a phenomenon known as the “New Public Management” (NPM),
a global shift towards developed countries using business sector methods in
public services.16 Here, the use of consultants has been extensively noted,
broadly as part of a hypothesis that consultants played facilitative roles in this
shift to the NPM. In this chapter, the extent to which consultants were a key
factor, or rather one of many factors, in the development of NPM is an impor-
tant consideration. The more specific academic literature on consultants, such
as Milan Kubr’s work, has keenly stressed the manner in which consultants
have been “the invisible hand behind some extremely important business and
government decisions,” for instance.17
By contrast, recent academic and popular histories of the British state have
been largely silent on the role of management consultants. Michael Burton
does not mention consultants once.18 Simon Jenkins does decry the arrival of
the “day of consultancy government” under New Labour, though explains
little about why, other than asserting pointedly that “Blair and Brown believed
that anyone with a large salary was blessed with a special virtue.”19 Anthony
King and Ivor Crewe attempt to explain why governments “blunder” (with
reference to numerous consultancy projects) without ever interrogating why
consultants were required in the first place.20
The final type of source—the memoirs of civil servants—is interesting
because of the nuances it raises. Michael Barber’s semi-autobiographical account
of Tony Blair’s PMDU, Kate Jenkins’ account of the development of the Next
Steps agencies in the early 1990s, and Duncan Campbell-Smith’s biography of
the Audit Commission are excellent because they chronicle an important, and
massively overlooked, feature of the state—the day-to-day details.21 The point
is expressed eloquently by Michael Barber: “stubborn persistence, relentless
monotony, attention to detail and glorying in routine are vastly underestimated
in the literature on government and indeed political history.”22
   Delivering, 1990s–2000s  203

Thus the emergence of the “hybrid state” can only be told with reference to
a wide array of sources and themes: marrying geo-political and economic
trends with the dull routines of Microsoft Excel financial models and
PowerPoint presentations.23 It is not a simple history. This chapter traces its
development from the 1990s onwards. Four areas are covered: the political
economy of the period, which witnessed a focus on public service reform
across developed economies; the development of outsourcing in local govern-
ment, and in particular the workings of Capita plc; the PMDU and the
reforms of Tony Blair’s second administration; and the years 2010–2015,
which saw a sharp retrenchment in consultancy expenditure by the public
sector, but nonetheless a consolidation of the influence of consultancy on the
state. A particular focus is paid to a new “outsourcing generation” of consul-
tancy firms. Each of these strands helps to articulate and illuminate how the
British state of the early twenty-first century became one of public and private
partnership; where the lines between state and non-state, once blurred, began
to evaporate.

 he International Political Economy of State

T
Reform
Citizens and businesses expect the same levels of access and personalisation from
public services as they receive from leading [international] private sector organ-
isations such as Amazon and Tesco. They expect to be able to access information
from multiple locations and in ways that suit them rather than the providers.
(Quote from Government ICT strategy, HM Government, 2010)24

In her political memoirs, Margaret Thatcher—Prime Minister of Great

Britain from 1979 to 1990—reflected with considerable satisfaction that her
governments had overseen a decrease in the size of the British state (which she
defined as the proportion of GDP spent by the public sector) from 44 per cent
to 40.3 per cent.25 (It is significant to note that this hardly represented a fun-
damental change in state expenditure—indeed the proportion was lower under
New Labour.) In part, this can be explained by Eric Hobsbawm’s observation
that only by attempting to dismantle the state do you actually strengthen, and
therefore increase, the costs of, it. In Hobsbawm’s words: “Central power and
command are not diminishing but growing, since ‘freedom’ cannot be achieved
except by bureaucratic decision.” (Much of this chapter gives credence to
Hobsbawm’s observation.)26 Thatcher’s determination to “roll back the fron-
tiers of the state” reflected a broader change in attitudes towards the Welfare
204  A. E. Weiss

State: from a postwar view that the state would help to build the “New
Jerusalem” to one where the state was actively impinging on the lives of citi-
zens.27 The state, in short, needed to be more private sector like, as the above
quote from the government’s ICT Strategy indicated. Whilst we have already
seen that management consultants entered state consultancy services—and
thrived—in an era of postwar economic collectivism, the largest expansion in
consulting services occurred from the late 1980s onwards. This work often
involved information management and technology services, privatisation, and
outsourcing—all of which brought consultants actively into the business of
managing and delivering public services.
Understanding this change in political opinion towards a smaller British
state is therefore important to understanding the rise of consultants. Think-­
tanks such as the Institute of Economic Affairs (founded to promote the ideas
of the intellectual godfather of much of Thatcher’s Conservatism, Frederich
Hayek) had been pronouncing that relative economic decline was due to
Britain being “over-governed, over-spent, over-taxed, over-borrowed and
over-manned” since the early 1970s.28 However two events in the second half
of the decade in particular brought these views into the political mainstream.
The first was the International Monetary Fund’s (IMF) $3.9 billion loan to
the British economy in September 1976. Whilst this loan was a result of price
shocks in the international oil market which were outside of the UK control
(a symptom of an increasingly globalised world), the implications, as dis-
cussed by the Labour Cabinet, would be “cuts to public services so deep as to
endanger their basic function” in order to bring public expenditure down.29
The IMF conditions forced public expenditure retrenchment to become a
political reality, whilst also fracturing the Labour Party, leading to a far-left
faction gaining ascendancy in the 1980s under the leadership of Tony Benn
(who by this time was no longer actively encouraging the use of consultants
to reform the public sector as he had done in the 1960s). This factional split,
and the rise of the Social Democratic Party as a corollary, explains much of
why the party never came close to unseating Thatcher throughout the 1980s,
despite her government failing to win a majority of the electoral vote.30
The second critical incident was the 1978–1979 “winter of discontent.” As
a result of the conditions imposed by the IMF loan (which demanded £2.5
billion in public expenditure reductions) public sector unions protested.31 On
January 22, 1979, alone, 1.5 million workers went on strike.32 As NHS wait-
ing lists soared to 125,000 patients, public confidence eroded in the state.33
Sir Alex Cairncross, former Head of the Government Economic Service, said
of the period: “The intellectual background was changing. There was more
scepticism and distrust of the power of government. Some of those who had
   Delivering, 1990s–2000s  205

campaigned for more planning at the beginning of the 1960s now campaigned
for a more limited agenda for the state.”34 Cairncross’ verdict is supported by
the historian Glen O’Hara’s assessment that: “planning failed to live up to its
promise.”35
It is within this context that we must place the rise of consultancy from the
late 1980s. For instance, the FIS (installed with the help of Arthur Andersen)
in 1976 helped the Treasury improve its management of public expenditure;
a pre-requisite of the IMF bailout.36 Thatcher’s subsequent Financial
Management Initiative (FMI) built on these principles and extended them to
other government departments. Consultants from Hay MSL, Arthur
Andersen, and Coopers and Lybrand worked on the FMI.37 The March 1987
“Next Steps” report by the Efficiency Unit proposed the creation of govern-
ment “agencies” which focused on delivering services as opposed to devising
policy. These agencies would have “framework agreements” with parent
departments. The Efficiency Unit was staffed by advisers from “within and
outside the civil service.”38 The Next Steps Report and recommendations were
intellectually linked to the FIS and FMI with their heavy focus on improved
organisational budgeting and measurable performance management. The
focus on separating policy from delivery, setting performance contracts,
frameworks, and targets ran throughout all of these changes in the machinery
of the state. Thus when outsourcing, privatisation, and contract management
gained prominence and became a key part of consultancy work from the
1990s onwards, the principles underpinning them were hardly novel con-
cepts—they had numerous administrative forerunners (most of which were
implemented previously with the help of consultants) which helped to explain
their ready adoption by the state. For instance, John Guinness, a former per-
manent secretary in the Department of Energy from 1991 to 1992, recalled
that “vast numbers of consultants” were used in this period for advice on
privatisation.39 Tables A.2–4 give further details of consulting firms used for
privatisation advice in this period, although it is worth noting that a broad
array of advisers were used during privatisation. As Peter Walters, former
Chairman of British Petroleum, reflected in 2011 on his role in BP’s privatisa-
tion in 1987, a wide range of “expert advisers” were hired, but these were
predominantly from the world of investment banking rather than manage-
ment consultancy; Walters recalled S.G. Warburg and Lazards being involved
in early discussions, for instance.40
206  A. E. Weiss

In Search of the Reinvention of Government

International developments also meant that new models of public governance
from which consultants were to profit extensively were likely to meet a recep-
tive audience in Britain. Though much has been written about the global
transmission of American management ideas in the postwar period, less has
focused on the rationale behind the concepts.41 By focusing on why these
ideas developed, the importance of Cold War politics as well as developments
in the US private sector becomes apparent.
Published in 1982, a few months before President Ronald Reagan denounced
the Soviet Union as an “Evil Empire,” the management book In Search of
Excellence was the ultimate paean to American capitalism. The authors, Tom
Peters and Robert Waterman—both consultants in McKinsey’s San Francisco
office at the time—sought to identify, commoditise, package, and sell what
“excellent” American companies did.42 (Intriguingly, Peters and Waterman’s
book was an internal McKinsey project which was a reaction to their loss of
consulting market share to the BCG in the 1980s. Out of this crisis emerged a
highly profitable new service line of “corporate culture.”)43 In the process, they
created the “McKinsey 7-S framework” which posited seven categories of activ-
ities which “excellent” companies did well: strategy; structure; systems; shared
values; skills; style; staff. Almost 30 years later, influential publications on cen-
tral government changes still used the 7-S framework as the basis of their anal-
ysis.44 In Search of Excellence was a huge commercial success—hitting the New
York Times bestseller list and shifting over ten million copies.45 Arriving amidst
the backdrop of an economic recession, it gave Americans new-found confi-
dence in their economy. As the New York Times noted, the “feel-good” President
Ronald Reagan would have “loved” a Public Broadcasting Service (PBS) film
on the book to have been shown at his second inauguration event.46
The impact of In Search of Excellence would be long-lasting. When Bill
Clinton launched the “National Performance Review” (NPR) in 1994, he
promised to “radically change the way government operates – to shift from
top down bureaucracy to entrepreneurial government.”47 The NPR borrowed
its ideas directly from the influential book Reinventing Government from
1992: referring to the work of Peters and Waterman on no fewer than eight
occasions.48 Reinventing Government claimed to be a:

call to arms in the revolt against bureaucratic malaise and a guide to those who
want to build something better. It shows that there is a third way: that the
options are not simply liberal or conservative, but that our systems of g­ overnment
can be fundamentally reframed; and that a caring government can still function
as efficiently and productively as the best-run businesses.49
   Delivering, 1990s–2000s  207

Clinton himself claimed that the book “should be read by every elected
official in America. Those of us who want to revitalise government in the
1990s are going to have to reinvent it. This book gives us the blueprint.”50 Of
course, the book cited In Search of Excellence as a major influence, stating that
the authors “had learnt a great deal…from [the work of ] Tom Peters and
Robert Waterman.”51 Thus there is great significance in the most important
politician on the world stage—America’s global position reinforced by the
break-up of the Soviet Union—proclaiming a “third way” and the virtues of
“businesslike government” for our history of consultancy and the state.52
Vice-President Al Gore, who was asked by Clinton to achieve this “reinven-
tion of government,” published the intriguing (if somewhat bizarre) semi-­
cartoon pamphlet “Businesslike Government” and left no doubt that instilling
the principle that “taxpayers are customers too” in state services was a major
administrative priority for the Democratic Party.53
Before returning to the impact of US politics’ heralding of a new, “third
way” on Britain, two further points must be made regarding the impact of
international events. The first is that—as wars often do—the Cold War accel-
erated government interest and funding for digital technologies.54 For exam-
ple, as a result of government contracts, IBM increased its standing and
financial strength in this period which allowed it to invest in and develop
mainframe computers for corporate use, which both massively expanded tech-
nological possibilities and opened the doors to a far greater use of data which
consultants could analyse.55 By the 2000s, “information technology” was the
largest single type of consulting service offered by MCA member firms (23 per
cent of all public sector income came from “IT consulting” work in 2009).56
The second is that the United States did not have a monopoly on management
thought in this period. In the postwar period, seeking to rebuild its economy,
Japan achieved competitiveness through the adoption of “lean” manufactur-
ing techniques.57 This was watched with considerable interest in both Britain
(see the 1976 CPRS report on the Japanese economy) and America (see
Richard Schonberger’s Japanese Manufacturing Techniques from 1982).58
Whilst there was undoubtedly an exchange of American management ideas
into Japan, particularly the strand of scientific management thought associ-
ated with Frederick Winslow Taylor, it seems that “lean” was a largely Japanese
phenomenon.59 This is important, because during the early 2000s in Britain
“lean” became a particularly popular management concept in public services.
For example, the NHS Institute for Improvement and Innovation explicitly
espoused “lean thinking”—thus highlighting the truly global, and not just
American, transmission of management ideas in this period.60

* * *
208  A. E. Weiss

A large number of social scientists have described the administrative

changes in European, North American, and Australasian countries since the
1980s as representing an era of NPM.61 As the social and political scientist
Christopher Pollitt has demonstrated persuasively, whilst there have been
many geographic differences of NPM, the underlying point that it contained
at heart the “ideology of treating government as a business” is helpful for two
reasons.62 Firstly, as Clinton’s earlier comment attests to, it positions NPM
firmly in the political movement of the “Third Way” which New Labour
sought to encapsulate; in this movement, divides such as liberal or conserva-
tive, government or business could be transcended.63 Secondly, it allows us to
answer the question: to what extent was NPM adopted in Britain?” Clearly,
the move towards “choice and competition” in the Conservative prime min-
ister John Major’s “Citizen’s Charter” of 1991 welcomed a more “business-
like” attempt to run government.64 Yet what is most interesting is the
continuity in this thought from the early 1990s onwards, across the Major,
Blair, and Brown administrations. In 1993, when Major announced that
public services should become “full participants in the more competitive and
demanding economy,” he was explicitly forwarding the view that public
should mix, act, and compete with private.65 Five years later, the language of
his Labour successor, Tony Blair—this time sharing the stage with President
Clinton in New York—was scarcely different, as Blair heralded the view that
the state should mix with the market.66 Consultants noted this emphasis with
keen interest; McKinsey published its own report on how Britain could
improve its productivity through greater mixing of public and private exper-
tise on Blair’s election. The report received considerable favourable coverage
and debate in the House of Commons.67
Reflecting on his ten years in office, perhaps Blair’s autobiography sums up
this business-oriented mindset best:

Increasingly, prime ministers are like CEOs or chairmen of major companies.

They have to set a policy direction; they have to see it is followed; they have to
get data on whether it is; they have to measure outcomes.68

It cannot be taken for granted that Blair’s post-office holding assessment of

his stewardship of Britain reflected how he actually behaved as prime minister.
Blair’s autobiography may have overplayed his businesslike approach to gain
favour or credibility with the company he kept on leaving office: in 2008, for
instance, Blair earned £2 million in his role as an advisor to the multinational
bank JP Morgan.69 Yet many of Blair’s actions as prime minister support the
   Delivering, 1990s–2000s  209

assertion that he was truly business-minded: taking his Labour shadow cabi-
net on a “working weekend” to learn about business techniques; New Labour’s
courting of big businesses; and, as we shall see, his support for setting up a
more corporate overview of government through the PMDU all point to this
fact.70 And so, if a country is a company, and its political leader perceives
himself to be its chief executive, then hiring consultants to recommend how
the country can perform better seems like no leap of logic at all.

The Rise of Outsourcing

I could not care less about Private Eye [a satirical magazine] calling us ‘Crapita’.
We paid £836 million in tax to the Treasury last year, which they wouldn’t have
got if it wasn’t for us. (Paul Pindar, on resigning as Chief Executive of Capita
plc, November 18, 2013)71

By 2013, around £90 billion of public money was spent on outsourced

goods and services. Traditionally “blue-collar” jobs such as hospital cleaning,
portering, or security roles as well as “white-collar” jobs like financial manage-
ment were delivered for the state by non-state actors, primarily from the pri-
vate sector.72 This use of the private sector represented a major discontinuity
in the short history of the postwar British state. The agents delivering public
services had changed. So too had their numbers; the civil service workforce
dropped to just over 400,000 by 2014, down from around 720,000 in 1978,
before the election of Thatcher.73 And most intriguingly, it seemed that public
opinion about who delivered public services had shifted too. A 2010 survey,
by the pollster Ipsos Mori and the consultancy Accenture, showed that the
British public had a relatively “pragmatic” approach towards private sector
involvement in delivering public services.74 (Although, research in 2007 by
John Clarke and others suggested that this did not mean the majority of those
who used public services saw themselves as “consumers” or “customers” of
public services, despite the attempt of the second New Labour administra-
tion.)75 Even the term public service—more commonly used in political dis-
courses since the mid-1990s—had implications. The substitution of the term
service for sector highlighted the New Labour government’s conviction that it
was agnostic about who delivered public services; they did not need to be
solely beholden to public sector workers.76 Once again, the blurring of “pub-
lic” and “private” lines in the “hybrid state” becomes apparent. The pre-­
Welfare State was characterised by services being delivered by private sector or
charitable institutions such as hospitals and asylums, and so the “hybrid state”
210  A. E. Weiss

should not be seen as a unique historical development—yet it did mark a

fundamental break from the immediate post-Welfare State era.77
In the same period, the nature of management consultancy was changing
rapidly too. As Ian Watmore, former Cabinet Secretary and Global Managing
Partner at Accenture, opined in 2014: “it is notoriously hard to define con-
sulting…it’s like comparing an apple with an orange with a chair with a cab-
bage with a tree.”78 Whilst few of the major outsourcing companies in 2010s
Britain—G4S, Serco, Capita, and Atos Origin—would define themselves as
“consultancies,” all bar G4S were members of the MCA (or at least had mem-
ber bodies which were at one point), and “outsourcing advice” became a sig-
nificant consulting service line—representing nearly 10 per cent of all MCA
member fee income in 2012.79 The protean nature of the consultancy indus-
try has been stressed throughout this book, and the growth of consultants
offering multidisciplinary services and outsourcing advisory services high-
lights another important change in this period. As such, this era merits the
categorisation of another “generation” of consultancy—the “Outsourcing
generation,” featuring members such as Capita, Serco, and Atos Origin (see
Table 5.2).
This grouping is helpful because it was historically distinct—emerging in
the 1990s—from the other consulting generations, though it is important to
note that this group (like all the others) engaged in many distinct services,
thus further undermining the concept of an analytically unified “consulting
industry” which the current academic literature on the subject implies.80 This
is important, because in this period “outsourcing” became a significant service
line for consultants, as Table 5.3 demonstrates.
Like consulting, “outsourcing” is a similarly contested term. Whilst in most
private sector definitions it relates to the process whereby a company moves a
service or function to another country to reduce costs, in the British public
sector it is more commonly understood to mean the use of the private sector
to deliver public services—which itself has become unhelpfully synonymous
with privatisation (the selling of public services to the private sector).81 It is

Table 5.2  Four largest outsourcing service providers in the UK public sector, 2013a
UK public sector revenue
Company (2012–2013) Held MCA membership
Serco £1.8 billion Yes
Capita £1.1 billion Yes
G4S £0.7 billion No
Atos £0.7 billion Yes
National Audit Office, “Delivery of public services”, 5
a
   Delivering, 1990s–2000s  211

Table 5.3  Public sector MCA service line consultinga

Service line 2002 (%) 2003 (%) 2004 (%)
Outsourcing 24 37 39
IT-related 29 21 25
Otherb 7 6 11
Programme/project management 16 13 10
Operations 6 2 8
Strategy 9 7 5
Human resources 9 14 3
a
Author calculations from MCA annual reports
b
Included: business process re-engineering, change management, economic and envi-
ronmental, financial, marketing, and corporate communications

Capita UK revenue, £m
2012: Entrust joint venture
3500 with Staffordshire County
2011: 21 acquisitions Council begins. 14
(£341m total) including acquisitions (costing £178m)
3000 Venture (private sector) and
Applied Language
Solutions. DVLA and TV
2008: Partnership Licensing contracts begin.
2500 with Sheffield
City Council. 12
acquisitions 2010: 12
2007: 12 2009: 12 acquisitions
2000 (costing
acquisitions
£147.4m) acquisitions (£301m) including
(£114m) (costing SunGard Public
£177.5m) Sector and Medical
1500
Group

2005: Partnership with two

1000 major local authorities
(Birmingham City Council
and Harrow Council)
2003: Implements
500 Congestion Charge
zone for TfL

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Fig. 5.1  Growth of Capita. (Adapted from NAO, Delivery of public services, 26. Capita
revenues before 2004 are for all income, as it did not have significant non-UK opera-
tions in this period)

the definition of using the private sector to deliver public services which is
adopted throughout this chapter.
This section focuses largely on the development of Capita plc.—a UK-based
public company, formed in 1984, which provided a range of services covering
catering, contract management, finance, recruitment, and administrative
facilities and by the 2000s was largely synonymous with characterisations of
the “hybrid state.” By 2012–2013, Capita had global revenues of £3.4 billion,
of which £1.1 billion was from the UK public sector (see Fig. 5.1).82
212  A. E. Weiss

Capita is important to our history of the state and consultancy for three
reasons. First, because the rise of Capita is directly linked to political develop-
ments and in particular the Conservative local government reforms of the late
1980s. Second, Capita—though firmly regarded as an “outsourcing” com-
pany by the early 2010s—began existence as a consultancy firm, showing the
changing nature of consultancy in this period. And third, local government—
from which Capita gained much of its income—is a frequently neglected part
of the British state in historical analysis, and as this section shows, reforms
in local government can have major repercussions for other parts of the public
sector.
As Young and Rao have demonstrated, in the immediate postwar period,
confidence was high in the ability of local government to rebuild the British
state.83 The two priorities in Britain were improving education standards and
building more housing stock. Both of these fell firmly in the remit of local
authorities to provide. As the historians argue, “[under Attlee’s government]
local government was the most important single agent of social reconstruc-
tion, playing a crucial role in the development of social policy within the
framework of the Welfare State.”84 Yet by the 1980s, political attitudes had
reversed and no longer held the local elements of the state in high regard and
encouraged the use of the private sector. Thatcher was actively hostile to local
authorities. The concept of “compulsory competitive tendering” (CCT)—
that local authorities had to open up services to competition from the
market—was not novel. Harold Macmillan had mandated in August 1959
that one in three of every local government contracts needed to be open to
competition (though this was largely ignored by authorities) and a Conservative
party study group commissioned by Ted Heath eight years later similarly
came out in favour of competition.85 It was, though, Thatcher—whose gov-
ernment frequently found itself in dispute with local authorities—who most
vigorously sought to enforce market disciplines on local government. The
Local Government, Planning and Land Act 1980 introduced CCT for build-
ing construction, maintenance, and highways work. This was extended as part
of the Local Government Act 1988 to cleaning, grounds maintenance, cater-
ing, vehicle maintenance, and refuse collection, and even further as part of the
Local Government Act 1992 to administrative services such as finance,
­computing, library, and other services, as well as the requirement to publish
“performance standards” information.86 Mandating all contracts to have
objectives, performance targets, standards, and plans placed demands for
skills on local authorities which they did not necessarily hold in-house. It is in
this context that the emergence of Capita can be explained.
   Delivering, 1990s–2000s  213

Capita started in 1984, originally as part of the Chartered Institute for

Public Finance and Accounting (Cipfa): a national membership body which
provided IT systems and training to staff in local authorities. Building up an
annual turnover of around £400,000, the four founders (Rod Aldridge, Rich
Benton, Roger Brier, and Mike Burr)—with the backing of the private equity
company 3i—bought the organisation from Cipfa and set up Capita in March
1987.87 Capita spent most of 1988 advising councils’ IT departments on how
to implement the forthcoming community charge (known as the “poll tax”).88
Significantly, throughout this period Capita referred to itself in all press
releases as a “consultancy.”89 However in 1989, Berkshire Council awarded
Capita its first outsourcing contract—to run its computer services division.90
From this point, the company expanded quickly—moving into new services
and acquiring a number of organisations which could also provide outsourc-
ing services (see Fig. 5.1), and, in the words of one of its co-founders, Rich
Benton, “our model changed to outsourcing overnight.”91
Why Capita became the outsourcing solution to so many local authorities
in this period was borne of three reasons. First, much as in the same way the
“American generation” of consultancies sought to model themselves on the
elite British civil service, Capita explicitly aimed to resemble local authority
officers. All four founders had a local authority background or experience
(two were local government accountants, one a civil engineer and another, a
transport accountant) and they aimed to employ “public sector-experienced
staff, such as revenue collectors, specialists, teachers, housing inspectors” in
order to be “credible.”92 They appealed directly to a local government ethos
and culture, which minimised the risk of a backlash from public sector staff.
Aldridge had spent many years working as a local government accountant in
Sussex Council before becoming a technical director at Cipfa; his background
in accountancy would have thereby made him well placed to understand the
needs of chief officers in  local government. For example, Bill Roots, Chief
Executive and Finance Director at Westminster City Council when a multi-­
year outsourcing contract was agreed with Capita in 1998, was also an accoun-
tant by profession.93
Second, amidst expectations of strikes and mass redundancies owing to
local authority expenditure reductions, Capita offered a route which appeared
to minimise the likelihood of both of these. Under rules on Transfer of
Undertaking (Protection of Employment) Regulations first implemented in
1981, Capita would take on responsibility for the employment of staff in
outsourced services and therefore take the public blame for any compulsory
redundancies.94 Although redundancy figures were in fact low, at around 1 per
cent, Capita nonetheless gained a reputation for workforce reductions. As
214  A. E. Weiss

Rich Benton recalled: “in the early days I would come up to a Council office
with my Capita umbrella and people would lob stuff out of the window onto
me.”95
And third, Capita—and others, such as EDS, Serco, and Capgemini—
benefited from the fact that the work they were doing was actively sponsored
by the state. Here, the history of the Audit Commission is instructive. Set up
by Michael Heseltine in 1983, the Audit Commission had the explicit aim of
“making recommendations for improving economy, efficiency and effective-
ness in the provision of local authority services.”96 Heseltine wanted a
McKinsey-style unit to undertake this role, and hired an ex-firm Director,
John Banham, to head the commission. (Important to our understanding of
the nature of “elite networks” in British society, Banham’s successor was spot-
ted in November 1986 on a flight back to London from Australia where
Banham had been watching a cricket tournament, the Ashes. On the flight
Banham approached his former colleague at McKinsey, Howard Davies, and
suggested he should apply for the role. Davies did, and was successful in his
application.)97 Banham had considerable public sector experience behind
him; working on the 1975 CPRS Future of the Motorcycle Industry report and
1974 NHS reorganisation (see Chap. 3). Intriguingly, Banham also had spent
a large amount of time working in Washington, DC, for the public sector.
Washington, DC, was highlighted in Reinventing Government as a case study
exemplar in modern government.98 Banham was emphatic that the Commission
would resemble his previous employer in every way possible, stating: “basically,
I saw the Commission as a mini-McKinsey.”99
The Audit Commission therefore played an overt role in this move towards
more, in the words of Al Gore, “businesslike government.” It published reports
and recommendations on the financial benefits of CCT (1989), the impor-
tance of performance measurements, and indeed how to make the best use of
management consultants (1994).100 The change to a New Labour government
led to little deviation from this trend. For example, whilst CCT was dropped,
the new administration’s 1999 Local Government Act promoted the concept
of “best value” which continued the general impetus behind Conservative
reforms.101 This time, councils were encouraged to set contract standards and
measurements, and would be reviewed by the Audit Commission as to how
successfully they were implementing them. In practice, as the rise of Capita
demonstrates, there was no slowdown in the growth of outsourcing services.
This increased growth of consulting and outsourced services in local gov-
ernment appears to have barely registered in the consciousness of elected poli-
ticians.102 In his autobiography, Heseltine described the Audit Commission as
a “most ambitious innovation…[which helped] ensure that local people were
   Delivering, 1990s–2000s  215

properly informed about the councils they elected”; yet, like Thatcher, he
makes no mention of CCT.103 Blair omits to mention the concept of “best
value,” or for that matter anything at all on local government, in his mem-
oirs.104 This political aversion to the details of delivering government services
appears to ring true in local government too. Rich Benton explains the main
relationships of Capita were with authority Chief Executives and Finance
Officers: state officials, not elected local politicians. Benton gives two reasons
for this: “[politicians] were transient and liable to change; and there was no
surer way to piss off the Chief Executive than by going straight to the [politi-
cal] leader with a ‘bright idea’.”105 Similarly, there appeared to be little party-­
political slant to the use of Capita. Over the period 1993 to 1998, the company
won more contracts with Labour-led Councils than Conservative ones,
despite its hostile relationship with trade unions.106 Indeed, the dangers of
developing relationships with politicians were notably demonstrated when
Rod Aldridge stepped down as Chief Executive of Capita following the furore
surrounding a £1 million donation he made to the Labour Party. Though no
wrongdoing was ever proved from either party from this episode, how it
appeared in public—politicians in the pockets of consultants—mattered
greatly.107 Again, it is apparent that the relationship between consultancy and
the state was one between civil servants and consultants, with politicians
barely involved.
Nonetheless, the growth in outsourcing had a material impact on the
nature of the British state. Capita’s success in local authorities allowed it to
expand to other areas of the public sector. Over the course of the early twenty-­
first century, Capita managed Transport for London’s car congestion charge in
2003; collected the BBC licence fee; operated the Criminal Records Bureau
for ten years; and in July 2014 undertook a six-year contract to manage the
electronic tagging of offenders.108
Capita’s running of the Criminal Records Bureau (CRB) provides a perfect
case study on complex interconnections between politics, the state, private
profit, and social mores. The CRB—which checked for criminal backgrounds
for any individuals attempting to work with children or vulnerable adults—
was born from New Labour’s embracement of the “Third Way.”109 At his sec-
ond leader’s conference speech in Brighton in 1995, Tony Blair made the
clearest proposition to date of his vision for the Labour Party. Keen to empha-
sise how New Labour would champion “law and order” as an issue—which
the Conservative Party was traditionally viewed as being strong on—Blair
proclaimed (and, as an aside, note how he used the rhetorical technique of
thesis, antithesis, and synthesis regarding the polarised debate on cause and
punishment to highlight how New Labour was presenting a “middle ground”):
216  A. E. Weiss

It has always been absurd that the debate about crime in this country has some
talking of its causes and others of the need to punish criminals. Sweep away the
dogma – tough on crime, tough on the causes of crime… Law and order is a
Labour issue today.110

Part of this new mantra included a greater focus on the safeguarding of

children. The Police Act 1997 made provision for the Criminal Records
Bureau to be established in Merseyside by the Home Office to undertake
“criminal record checks for employment and other vetting purposes.”111
Through a competitive tender (which was evaluated by PA Consulting) Capita
beat PricewaterhouseCoopers to a ten-year £400 million public-private part-
nership (PPP) contract with the Passport and Records Agency in 2000.112
Whilst Capita was to work collaboratively with the agency in the “business
planning” in the run-up to the launch of the Bureau, once running, responsi-
bilities were to be split between Capita, “operating the call centre, input appli-
cations for checking, collect fees due, develop and maintain the IT
infrastructure, and print and issues,” and the Agency setting “the overall strat-
egy, managing the Capita contract, carrying out checks on the Police National
Computer and managing relationships with local police, Registered Bodies
and other Government Departments.”113
The Bureau was beset with a multitude of problems. An NAO report in
2004 found that the early business planning was flawed, particularly with
respect to estimates around how users of the Bureau would make applications.
Capita and the Agency assumed 70 to 85 per cent of applications would be by
call centre and the rest online—in practice, 80 per cent of applications were
paper-based.114 This led to significant delays in processing applications, of
which 90 per cent were meant to be responded to in three weeks. Unexpected
tragedies also challenged the Bureau. In August 2002, two schoolgirls, Jessica
Chapman and Holly Wells, were found murdered in Cambridgeshire. A
school caretaker, Ian Huntley, and a teaching assistant, Maxine Carr, were
arrested and eventually found guilty of the crime. Yet, in a knee-jerk reac-
tion—as argued in compelling fashion by the sociologist Frank Furedi—the
Department for Education and Schools (DfES) immediately announced
strengthened background checks to be required for all school staff. Such was
the backlog created some schools had to delay opening for the new term and
others refused to allow non-vetted teachers back. The DfES eventually revoked
its decision owing to the chaos caused.115 This increased demand on the
Bureau arising from the policy change meant that the Home Office had to
renegotiate its ten-year arrangement with Capita within the first year of the
contact.116
   Delivering, 1990s–2000s  217

Yet Capita’s ten-year contract was not renewed in 2013, and to Capita’s
publicly expressed “disappointment” a new outsourced services provider, Tata
Consultancy Services, was instead selected on a five-year deal costing £143
million (less than Capita’s bid, and over £100 million less than what was ten-
dered for).117 Over the course of the ten years, however, Capita had played an
illuminating role in critical developments in the modern British state. Through
helping to deliver increased “vetting” of citizens of the state, Capita increased
the state’s ability to hold, access, and interpret information about citizens at a
scale not achieved before: an estimated 70,000 applications were processed
per week in the Bureau by the early 2010s.118 Capita also became deeply inter-
twined in the state’s operations by handling this sensitive information: the
Criminal Justice Bill had to be amended by the Home Secretary, David
Blunkett, in 2003 to grant Capita access to police and criminal records.119 In
the process, this public-private relationship helped to cement the new mixed
economy of public and private sector bodies working in partnership.
Highlighting the fact, when Capita’s contact was for renewal, there was no
talk of anyone other than a private sector partner taking up the contract.120
And such was the intimate interrelationship between the public and private,
and state and finance, when it was announced that Capita’s public sector con-
tract would be awarded to another provider the company experienced a large
drop in share price (12.5p) on the FTSE financial market.121 And finally,
Capita’s work with the Bureau highlights the clear managerialisation of the
British state in the early twenty-first century. All language of performance
regarding the Bureau revolved around “targets,” “success factors,” and “key
performance indicators”; when defending the Bureau’s performance in
February 2004, the Home Office minister Hazel Blears could have been read-
ing from Capita’s annual reports, stating: “since June 2003 it [the Bureau] has
issued 93 per cent of standard and enhanced disclosures within two and four
weeks respectively. It now processes over 50,000 disclosure applications per
week, more than twice as many as under the previous system.”122 In this man-
agerialised state, statistics and targets ruled, and outsourcing firms thrived.
In 2014, when asked how he felt Capita’s work had impacted on the British
state, Rich Benton proposed four areas: challenging the assumption that
­public services had to be provided by the public sector; changing the nature
of contracts to focus on outcome performance measures, as opposed to inputs;
moving outsourcing towards “white collar” as well as “blue collar” jobs; and
opening the door for other competitors.123 Earlier incarnations of outsourcing
in the 1980s—known as “contract management”—focused on cleaning, por-
tering, and security and placed a greater onus on inputs such as number of
waste paper baskets emptied. This gives credence to Benton’s claims.124
218  A. E. Weiss

However, the most lasting impact of Capita, and other outsourcers, is

more subtle, and twofold. First, these companies made it politically accept-
able again for private profit to be extracted from public services. Whilst pre-­
Welfare State Britain always had institutions which were free to make a profit
from providing public services, the Beveridge Report explicitly condemned
the presence of commercial interests in the new Welfare State.125 PPP and the
Private Finance Initiative (PFI) were, along with outsourcing, other examples
that the New Labour government was comfortable with profit-seeking in the
public sector (though the Conservatives introduced PPP and PFI in 1992,
Labour subsequently increased their use). In both instances, private providers
were encouraged to invest in public infrastructure projects to be repaid by the
public sector, with the risks borne by taxpayers.126 Second, the use of out-
sourcing companies resulted in a reduction in the services that local authori-
ties could do themselves. Michael Porter, the management academic, used
the term “core competencies” to describe the skills or services of an organisa-
tion which are critical to its success. Much private sector outsourcing devel-
oped in this period because, it was argued, “back-office” functions (i.e.
finance, administrative, payroll, human resources, and information technol-
ogy) were not “core competencies” and so could be outsourced to third par-
ties.127 It is clear that this exact same process happened to local authorities.
Yet there was little political discourse (indeed, looking through Hansard, one
could conclude there was no discourse) at the time about what the “core
competencies” of local government were.128 In practice, local government—
and much of the public sector—therefore unconsciously walked into a posi-
tion whereby many of its functions were taken over by the private sector. This
is important both because it changed the nature of what the state does (at
least temporarily) and because it proved difficult to take such functions back
into the public sector once they had been outsourced, thereby compromising
the future effectiveness of any state model which did not look to the private
sector for support.129
An implicit assumption made during this period was that the public sector
could be more private sector like. This had been a widely held belief amongst
state reformers since the days of the Fulton Report, which—as we have seen—
encouraged greater use of private sector consultants by the civil service. Yet
there is one fundamental difference between the public and private sectors:
the latter can be selective in its customer base, whereas the former—by its very
nature—must be universal. The term “cherry-picking” entered public admin-
istration discourses in the United States in the 1980s to describe this selectiv-
ity, where private sector companies picked the simple and cheap parts of state
operations during outsourcing, leaving the state to handle the complex and
   Delivering, 1990s–2000s  219

expensive elements and everything else. Lis Astall, who worked at Andersen
Consulting (later renamed Accenture) on numerous state contracts from
1984 to 2006, reflected in 2016 that one of the main differences between the
public and private sectors was that “there is no cherry picking in the public
sector… when [an outsourcing company] picks the easy 95 per cent and the
state deals with the hard bit.” In Astall’s view, this presented a potentially
destructive opportunity for politicians to draw the conclusion that the private
sector—because it could often demonstrate lower “cost per transaction” met-
rics compared with the state—was inherently more efficient than the public
sector.130 Astall’s concerns were well evidenced. In June 1997, for instance, the
prisons minister Baroness Quin drew exactly this conclusion regarding per-
ceived public sector inefficiency. Quin referred in the House of Commons,
during a debate on privately managed prisons, to analysis from a report which
showed “prisons operated by the private sector are 11–17 per cent cheaper
than comparable prisons in the public sector.”131 It is consequently revealing
that whilst consultants appeared to be aware of some of the challenges of out-
sourcing, the political class did not seem to—or chose not to—pick up on the
implications of the challenges.
Indeed, though these developments received a considerable amount of crit-
icism from the media and unions, politically there appeared to be a broad
consensus on their use. On entering office in 2010, the Coalition government
immediately looked to outsourcing companies to reduce public expenditure
levels and in just four years, government expenditure on outsourcing doubled
to £88 billion.132 The rationale for this appears relatively straightforward. For
the elected political class, protecting the most visible element of the state—
the services it provides (which by the 1990s had gained the term “front-line
services”)—was perceived to be vital in gaining electoral support. “Front-line”
workers such as teachers, doctors, and emergency workers had long held high
standing in British society, in a way in which “back-office” managers and
administrators never had.133 (One need only look at popular British television
shows in the period: The Bill, Casualty, and Morse focused on valiant front-­
line workers such as police, doctors, and nurses. Management either got in the
way or, as The Office later popularised, was a source of ridicule.)134 In the wake
of the 2008 global financial crisis and subsequent era of austerity in Britain,
outsourcing companies aligned themselves to this political imperative. By
offering to find economies in “back-office” state services—such as finance,
information technology, and administration—they gave hope to politicians
that “front-line” services could be protected. Indeed, this helps to explain why
outsourcing in this period was more popular in the public sector than private
sector; the latter would tend to favour mergers and acquisitions as a means to
220  A. E. Weiss

cost-cutting instead, which more frequently led to redundancies.135 Paul

Pindar, quote above, as Chief Executive of Capita, almost teased the political
elite with the point in an interview with the Financial Times in 2011:

When you can see local authorities closing libraries, swimming pools, it’s crimi-
nal. It’s a political agenda. Billions of pounds could be saved [through outsourc-
ing] and the public wouldn’t notice the difference. Why wouldn’t you outsource
council tax collection rather than closing a library?136

As Capita’s income grew in the immediate years after Pindar’s pointed

question, the answer became clear.

The Prime Minister’s Delivery Unit

Try getting change in the public sector and the public services. I bear the scars
on my back after two years in government and heaven knows what it will be like
after a bit longer. People in the public sector were more rooted to the concept
that ‘if it has always been done this way it must always be done this way’ than
any group of people I have come across. (Tony Blair speech to conference of
British venture capital funds July 1999)137

As his above quote attests to, Tony Blair felt that his first term as Prime
Minister, from 1997 to 2001, had failed to deliver the public service reform
he had promised. The highly publicised flu epidemic and NHS winter strug-
gles in late 1999 reinforced this point for Blair. This resulted in his renewed
focus on reform, leading to the 2000 Modernising Government White Paper,
which built on the 1998 Spending Reviews and the departmental targets con-
tained in Public Service Agreements (a clear continuation of the rationale
behind Major’s Citizens’ Charter).138 Addressing a meeting of venture capital-
ists, Blair shared his emotion on his difficulties in seeing through reforms as
his quote demonstrates. As Peter Mandelson, a key architect of New Labour,
wrote: “Tony [had] a fervent desire to change the way public services were run
and organised.”139 Blair’s own explanation for this desire was rather opaque,
stating, “I have an essentially middle-class view of public services – they need
to be better.”140 Yet the reality is that Blair—as his pronouncements on the
“Third Way” with Clinton had shown—cared passionately about reforming
public services, and he also considered himself a “moderniser” (like Harold
Wilson had done). He was disappointed with what was achieved in his first
term and decided to use his re-election as an explicit mandate to enact
   Delivering, 1990s–2000s  221

change.141 Indeed, Blair’s public service reform agenda, and its explicit focus
on choice, unveils the political ideology of “Blairism.” As Michael Barber, a
confidante of Blair and head of the PMDU from 2001 to 2005, recounted:

The theory [of Blairism and public service reform] was that you needed to make
public services good enough so that even those who could afford to pay would
choose to use them. This allowed you to still collect taxes to improve the service
and drive equity. We thought 40 per cent of GDP being spent on the state
would lead to service equity and universality, and I think we were proved about
right on that. I have always thought the traditional left critique of choice [to
drive up reform by breaking down monopolies] is bizarre, because the wealthy
have choice. If they wish to send their child to a particular state school, for
instance, then they can move catchment area; this is something the poor don’t
have. So by aiming to extend choice to the poor, you are empowering those on
low incomes.142

It is worth pausing to reflect on some of Barber’s emphasis here. The phrases

“I think we were proved right on that” and “I have always thought the tradi-
tional left critique…is bizarre” unmask a number of important issues for our
enquiry here. First, Barber’s use of “we” is instructive. Whilst Barber was once
a Labour local government councillor and stood unsuccessfully for parlia-
ment, as Blair’s Chief Adviser on Delivery he was a civil servant and at the
time bound to political neutrality by the Civil Service Code.143 Yet, clearly, the
“we” Barber refers to is the New Labour movement, thereby demonstrating
the extent to which politicians and civil servants collaborated to deliver an
intensely political project. Second, Barber’s defensiveness regarding the “tradi-
tional Labour critique” demonstrates the contested nature of both the New
Labour project and Blair’s legacy. Indeed, such was the perceived toxicity of
the Blair era that during Labour’s disastrous showing in the 2015 general elec-
tion, at least three prospective parliamentary candidates publicly rejected a
donation from Tony Blair for their campaigns.144 Whilst there can be little
doubt that Britain changed significantly under New Labour, particularly in
terms of public service reform, it would be remiss to fail to highlight that
these reforms were contentious even with the Labour party (though, notably,
other elements of Blair’s legacy were also of concern for some Labour support-
ers too)—demonstrating the complex forces at play during state reform.
Nevertheless, highlighting his passion for change, speaking on his election
in June 2001 Blair declared, “we have a mandate to reform, an instruction to
deliver.”145 And keen to maintain momentum, Alastair Campbell, Blair’s press
secretary, wrote to colleagues on July 25, 2001: “The country has given us a
222  A. E. Weiss

fresh chance but they are deeply concerned about the condition of Britain and
public services, disillusioned with politics and insistent we deliver. It is all that
matters.”146
Blair’s solution to this challenge to “deliver” was threefold. First, that suc-
cessful reform could come only from the centre. The words of his close advis-
ers attest to this. David Blunkett, former Education Secretary, reflected: “we
were right to drive from the centre [as when we didn’t] the foot [would] come
off the accelerator, [and] the results…just plateaued again.”147 Similarly, Blair’s
Chief of Staff from 1997 to 2007, Jonathan Powell, noted: “Blair came in
with a much stronger Number Ten operation. He was very clear that he
wanted that…people now focused more on the day-to-day, monitoring what
departments were doing for the Prime Minister.”148 And second, Blair was
focused on challenging the status quo (the “givens,” as he called them) and
getting the views of those from outside the civil service to do so. As he remi-
nisced: “I was still feeling my way, holding endless meetings with advisers,
experts and those within the services. I was trying to get a sense of how change
might be fashioned [and] formulated. I found it all intensely frustrating.”149
Third, and most importantly, Blair, and those at the heart of the New Labour
project, were of the view that there was nothing inherently virtuous in the
nature of public services. This draws parallels with Harold Wilson’s distrust of
the “nobs and administrators” in the civil service (see Chap. 2) which led to his
support for the use of consultants by the state in the 1960s, and helps explain
New Labour’s similar respect for consultancy’s expertise. Clarifying his “mid-
dle-class view” of public services expressed in his memoirs to The Guardian in
2010, Blair explained: “what I mean…is that, in the end, whether you like it
or not, what people expect from public services is increasingly what they get in
every other part of their life.” This requires some interpretation (and Blair’s
verbal tic of “in the end, whether you like it or not” alludes to some unease
whilst making this point), but Blair was effectively saying public services need
to be—and, by implication, were not—as good as privately delivered services
(i.e. “every other part of…life.”)150 This view was further reinforced by his
point made in the same interview with the journalist Martin Kettle that “if you
look at the emerging countries of the world ­today…what they are looking at,
increasingly, is how they can avoid some of the postwar settlement errors of the
developed nations… [of one] that is paternalistic, bureaucratic and basically
there for the people who can’t afford to get out of it.”151
A large part of the problem of the postwar settlement was perceived to be
overly powerful vested interests of public service professionals. As Blair
described in 2002, the postwar settlement was “the social equivalent of mass
production, largely state-directed and managed, built on a paternalist rela-
   Delivering, 1990s–2000s  223

tionship between state and individual, one of donor and recipient.”152 As part
of the same pamphlet in 2002, he announced a swathe of initiatives which
would usher in further competition and involvement from private bodies into
the public sector: PFIs in healthcare, PPPs in transport, and private prisons in
justice.153 Attenuating the power of the public professionals (and transferring
power towards the public—or, in the jargon of the time, “consumers”) was
key in this reform.154 Blair said as such in 2004, stating: “the professional
domination of service provision” by public sector officials had led to them
being able “to define not just the way services were delivered but also the stan-
dards to which they were delivered.”155 Charles Clarke, instrumental through-
out New Labour, similarly expressed disdain in 2007 that “professional
associations focused upon defence of their own short-term interests despite
obvious consumer concerns.”156 Julian Le Grand, a senior policy advisor to
Blair from 2003 to 2005, and academic at the London School of Economics
who since the late 1990s had done much to forward the concept of choice and
competition in public services, shared this view: in 2006 he condemned the
NHS for prioritising the “interests of those who worked within it than those
who used it.”157
Geoff Mulgan, head of the Prime Minister’s Strategy Unit and then Policy
Unit from 1997 to 2004, summed up the mindset of New Labour most pith-
ily, describing that in public services, “there was not much sense of service to
the public.”158 As Eric Shaw astutely historicised, this placed New Labour in
opposition to the “professional model” view of the public sector which held
that public services were best run by the public sector, and that this was evi-
denced by the strong, and positive, “public service ethos” demonstrated by
professionals working in the public sector.159 Whilst this model was dominant
for most of Labour’s history prior to Blair, it is significant that Harold Wilson’s
governments were most interested in challenging its assumptions. Brian Abel-­
Smith and Richard Titmuss, two advisers to the Wilson administrations, both
noted with caution the “power [which] may come to reside in the hands of
these [public sector professionals’] interests.”160 The Wilson parallel with Blair
extends into the use of consultants to challenge the “professional model.”
Both were sceptical of the inherent good of state officials, and both looked to
outside, private sector expertise for advice. Under Wilson, consultancy
emerged as a method of reforming the state. Under Blair, as we shall see, the
approach and methodology of consultants became a driving force in New
Labour’s public service reforms.
In this context, the claim made by Simon Jenkins that “public administra-
tion did not interest Blair” seems implausible.161 Jenkins recounts the enter-
taining story of the Cabinet Secretary, Richard Wilson, shouting at Blair and
224  A. E. Weiss

Gordon Brown in 2001: “your problem is that neither you nor anyone in
Number 10 has ever managed anything,” to which Blair replied he had man-
aged the Labour Party; Wilson challenged on the difference between “manag-
ing” and “leading,” which was supposedly “beyond the prime minister’s
comprehension.”162 Whilst it is true that Blair had not managed any organisa-
tion (inside or outside of government) prior to becoming prime minister, the
creation of the PMDU in 2001 highlights an explicit desire to reform public
administration.
The Delivery Unit was a small body (it never exceeded 50 staff), sitting in
the Cabinet Office, set up in 2001 with the explicit aim of helping govern-
ment departments deliver on a number of targeted public service improve-
ments. These were based on either the 2001 Labour Party manifesto or
government targets published during the 2000 Spending Review (see
Table 5.4).163
In Blair’s description, it was “staffed by civil servants but also outsiders
from McKinsey, Bain and other private sector companies. It would…laser in
on an issue, draw up a plan to resolve it working with the department
­concerned, and then performance-manage it to solution.”164 As a proportion
of central government expenditure on consultants, the unit was miniscule.
The cost of the unit in 2002/2003 was £3.1 million in total, a fraction of
departmental expenditure on consultants alone (see Table 5.5).165 Yet its influ-
ence and impact were profound.
The idea of the Delivery Unit came from three sources. First, the work of
a mild-mannered education professor, Michael Barber, had become noticed
throughout Whitehall in addressing school failure rates and improving pri-

Table 5.4  Prime Minister’s Delivery Unit priorities, 2001

Department Delivery Unit priorities
Health Heart disease mortality
Cancer mortality
Waiting lists
Waiting times
Accident and Emergency
Education Literacy and numeracy at 11
Maths and English at 14
5+ A*-C GCSEs
Truancy
Home Office Overall crime and breakdowns by victim type
Likelihood of being a victim
Offenders brought to justice
Transport Road congestion
Rail punctuality
   Delivering, 1990s–2000s  225

Table 5.5  Departmental expenditure on consultants (£m), 1998–2003a

Department 1998/9 1999/0 2000/1 2001/2 2002/3
Department for Transport n/a n/a n/a n/a 122.2
Department for Trade and Industry n/a 21.0 36.0 64.0 42.0
Department for Environment, Food and 45.0 24.0
Rural Affairs
Department of Social Security n/a n/a 21.9 19.0 13.0
Department for Health 7.3 8.1 6.5 6.8 7.1
Department for Education and Skills 5.0 3.7 4.3 5.0 4.0
Department for Culture, Media and Sports 0.0 0.1 0.1 0.1 0.1
Department for Work and Pensions 47.6 23.8 n/a n/a n/a
Foreign and Commonwealth Office 14.5 14.0 17.9 20.1 n/a
Ministry of Defence n/a n/a n/a n/a n/a
Department for International Development n/a n/a n/a n/a n/a
Home Office 4.6 10.3 27.9 21.1 n/a
HM Treasury n/a n/a n/a n/a n/a
Office of the Deputy Prime Minister n/a n/a n/a n/a n/a
a
Based on author calculations from Hansard responses

mary school literacy and numeracy through the Standards and Effectiveness
Unit in the Department of Education, from 1997 to 2000.166 Based on the
success of the Unit, Barber was asked by Blair to set up and run the Delivery
Unit in 2001.167 Second, the need for a Delivery Unit became clear as a result
of the demands the New Labour government was placing on the civil service.
As the Cabinet Secretary, Wilson said:

it became apparent in the civil service that what Blair and Brown wanted was very
different to the one which Major and Thatcher had left behind. It didn’t have the
skills they wanted. And whilst they kept expenditure down – by sticking to the
Tories’ expenditure plans in 1996-1998 (which nobody expected them to) they
then unleashed expenditure and found there was a severe deficit… [and] supply
of the project management and implementation skills they were seeking.168

As the Labour MP Brian White told the House of Commons whilst discuss-
ing the Modernising Government White Paper: “This country is particularly bad
at project management. Investing in the skills of project management would
benefit the Government.”169 To address this, Wilson recommended to Blair that
a Delivery Unit focused on implementing key policies be set up. (Interestingly,
Wilson had in mind the success of Thatcher and Major’s Efficiency Unit when
making his recommendation, buttressing support for recognising the impor-
tance of “path dependency” in explanations of state reform.)170 Third, whilst the
Delivery Unit’s culture undoubtedly proved a shock to the civil service, the
focus on delivery, targets, and performance management was far from novel
in the public sector. Indeed, an NAO report in May 2001 stressed that
“performance measurement is an integral part of modern government.”171
226  A. E. Weiss

As we have seen, such views were commonplace in the United States too. The
Delivery Unit should therefore be seen as part of a trend towards greater perfor-
mance management in the public sector, as opposed to an entirely novel
development.
Blair had no aversion to management thought (see for instance his taking
the entire shadow cabinet for a retreat in 1995 to learn about management
techniques), yet the extent to which he gave his personal backing to the
Delivery Unit is nonetheless surprising.172 One of Barber’s two demands for
taking the job as Head of the Delivery Unit was reporting directly to Blair
(the other was an office in Number Ten), to which Blair, via his principal pri-
vate secretary, Jeremy Heywood, assented.173 Yet even Barber was surprised by
the extent to which Blair committed to the Delivery Unit, even as foreign
travel demands (and attention on foreign policy) increased in the wake of the
September 11, 2001, terrorist attacks in New York and the Iraq War of 2003.
Blair continued to attend the vast majority of “stocktakes” (where the progress
of departments against targets was reviewed) with departments and devote
time and attention to the Unit’s reports.174
Such project-management-type processes as “stocktakes” were a hallmark
of the Delivery Unit. In fact, such was the impact of the Unit, that its own
methodology—“Deliverology”—became known around Whitehall. The
focus, in Barber’s words, was on asking simple questions of departments—
“What are you trying to do? How are you trying to do it? How will you know
if you’ve succeeded? If you’re not succeeding, what will you change? How can
we help?”—and using common managerial approaches to help answer these
questions. (In his memoirs, Barber listed ten factors which were vital to the
success of the Delivery Unit. One could lift these straight from a business
management textbook: accountability, leadership, project management, levers
for change, feedback and communication, timetable for implementation,
managing risks and constraints, fostering interdepartmental collaboration,
having sufficient resources, using benchmarking effectively.) It was, as Barber
acknowledged, “standard practice in the management of programmes and
projects, a discipline that emerged from engineering in the second half of the
twentieth-century and became second nature across most of business.”175
Whilst Barber deliberately wanted the unit to be staffed a third by civil ser-
vants, a third by management consultants, and a third by other outside
experts, the Delivery Unit quickly became associated with consultancy-style
work, thereby increasing the perception that New Labour was obsessed with
consultants.176 However the vast majority of the time consultants were actu-
ally either former civil servants or consultants on secondment from their par-
ent consultancies—representing the hybrid state in action. (Flexible,
   Delivering, 1990s–2000s  227

short-term “call-off ” contracts were in place to bring in additional resource—

for instance in 2006 £480,000 was spent on Capgemini’s services for a
Spending Review.)177 Of great relevance to this book, the methodology of the
Delivery Unit and the idea behind it came from the civil service, not consul-
tancy. Barber (who later joined McKinsey, thereby demonstrating a dissemi-
nation of public sector reform ideas into the private sector) learnt his
methodology from “management handbooks,” not consultants.178 And it was
Richard Wilson, who admitted in 2014, “I can’t for the life of me think of a
single project where I, personally, commissioned a study by management con-
sultants,” who proposed the idea of a Delivery Unit in the first place.179 In
other words, one of the most obvious examples of “consultancy-style govern-
ment” had, at best, an indirect link to consultancy.
Despite considerable media mockery—the journalist Quentin Letts, on
describing one of Barber’s annual presentations to the media, wrote: “his lan-
guage was as lifeless as Monday morning mullet. He droned on about missions
and cultures, milestones and trajectories, stocktakes and best-practice”—and
various attacks on New Labour’s “target culture”; the impact of the Delivery
Unit was impressive.180 Not only did permanent secretaries (who, in many
ways, had the most to fear from it) vote to keep it in 2005, Tony Blair described
it as “the most successful change I had made in the machinery of government,”
and the Delivery Unit model was replicated in governments in India, Indonesia,
Malaysia, South Africa, the Netherlands, Maryland, Los Angeles, Chile,
Colombia, and others.181
The importance of the Delivery Unit to Blair sheds light on a point made
by the sociologist Max Weber regarding bureaucracies. In his fascinating cri-
tique of modern bureaucracies, the anthropologist David Graeber highlighted
the Weberian argument that all bureaucracies seek to make themselves indis-
pensable to anyone attempting to wield power, usually by monopolising
access to information. In Weber’s words: “Every bureaucracy seeks to increase
the superiority of the professional informed by keeping their knowledge and
intentions secret.” As Graeber writes, “bureaucratic administration always
tends to be an administration of ‘secret sessions’ in so far as it can, it hides its
knowledge and action from criticism.”182 The role of the Delivery Unit was to
take this information out of departmental control and straight to the Prime
Minister.183 Pace Weber, however, the Delivery Unit is surprising because it
was ultimately a part of the bureaucracy which removed this bureaucratic
“information asymmetry” (where one party knows more information about a
given issue than another, thereby creating a power imbalance).184 Highlighting
this aim to strengthen political power by bringing knowledge of the state’s
working operations back to the centre of government was a critical concern of
228  A. E. Weiss

“Deliverology.” The method of achieving this was through a concept known

as the “delivery chain.” This addressed the question of how a minister in
Whitehall can effect change in an outer region of the United Kingdom.
Indeed, one could not look to a clearer example of centralising state power.
Barber’s description of this warrants sharing:

Suppose that a Minister promises to improve standards of reading and writing

among eleven-year-olds. Implicit in this commitment is that the minister can
influence what happens inside the head of an eleven-year-old in Widnes. The
delivery chain makes this explicit. What happens in that eleven-year-old’s head
is influenced chiefly by her teacher – the first link in the chain; the teacher is
influenced by the school’s literacy co-ordinator, who in turn is influenced by the
headteacher – the second and third links in the chain. The headteacher is influ-
enced by the governors and the local authority, who are influenced by the
regional director of the National Literacy Strategy, who answers to the national
director of the strategy. He in turn answers to the head of the Standards and
Effectiveness Unit in the Department for Education, who answers to the secre-
tary of state. And thus we have established the delivery chain. Those responsible
for delivery can then think through how best to exert influence at each link and,
when the plan is being put into practice, it is possible to check whether each link
in the chain is effective. Where there is a weak link it can be strengthened.185

Such moves to strengthen the role of the centre of government, and in par-
ticular, the department of the Cabinet Office, did not go unnoticed. Along
with the Delivery Unit, a Strategy Unit, Performance and Innovation Unit,
Social Exclusion Unit, and Third Sector Unit all found homes in the Cabinet
Office in this period, reporting directly to the Prime Minister’s Office.186
Individuals, such as John Birt—former Director General of the BBC and a
McKinsey Partner—were also brought in to advise the Prime Minister. Birt
joined as “strategic advisor to the Prime Minister” to undertake a wholescale
review of the criminal justice system. Despite, as Birt recalls, there being 300
academics in the Home Office doing specific work on youth criminal behav-
iour, Birt was the first to undertake for the Prime Minister a “landscape,
­big-­picture, system view.” In Birt’s opinion, he was using the “McKinsey
approach” to data and analysis to give this view.187 A 2010 review by the
House of Lords on the changing nature of government concluded that “greater
involvement and influence by the Prime Minister on policy delivery is inevi-
table in the modern age, that the Prime Minister’s role has evolved over a long
period under different governments, and that Prime Ministers will wish to use
all possible resources in pursuit of the role.”188
   Delivering, 1990s–2000s  229

Barber left the Delivery Unit in 2005. Over the next parliament it expanded
its focus into “capability reviews” of government departments (these reviews
were claimed in the media to be extremely critical, again highlighting the
extent to which the Delivery Unit was not beholden to bureaucratic self-­
interest), though it was disbanded by the Conservative-Liberal Democrat
Coalition Government in 2010.189 The main reasoning was simply that the
Unit was seen to be too closely linked to the previous administration. Indeed,
this was so much the case that the civil service was explicitly asked by the
incoming government to replace the term “delivery” with something less “jar-
gonistic.”190 Yet the Delivery Unit was resurrected by the Coalition govern-
ment in February 2012, this time renamed the “Implementation Unit,” with
the Prime Minister David Cameron eventually recognising the benefits of
such an organisation.191 According to Barber, it took the new administration
six months to realise the mistake of disbanding the Delivery Unit. Responding
to Steve Hilton, one of Cameron’s close advisers, Barber claimed, “you learned
fast – it took Blair four years to learn the same thing [the benefits of targets
and delivery].”192 (Indeed, numerous commentators suggested Cameron had
initially sought to take a much more “laid-back” approach to government
than Blair—an “executive Chairman”—as Harold Macmillan described the
role, rather than a CEO. This may explain his initial willingness to devolve
power from the Cabinet Office.)193 The similarities between twentieth-­century
histories of the once-heralded but long-disbanded “Garden Suburb”
Secretariat, Organisation and Methods Department, Civil Service Department,
CPRS, Businessmen’s Team, Efficiency Unit, and Delivery Unit are
apparent.194
Five factors stand out in terms of the relevance of the Delivery Unit to the
wider history of consultancy and the state. First, that the success of the
Delivery Unit, along with Blair’s Policy Unit and Strategy Unit as well as the
significant increase in the use of consultants during the New Labour era
(reaching £2.8 billion as an NAO report estimated in 2005–2006) all gave
credence to the view that Blair centralised state power around the Cabinet
Office and Number Ten, and had used consultants to help achieve this.195 This
was a view which had already gained traction since the early years of Blair’s
premiership. A 1999 cartoon by Richard Willson in The Times depicting a
civil service kow-towing to Blair, following recommendations from McKinsey,
attests to this.196 And so it is within this context we can understand the politi-
cal intent behind Cameron’s attack in 2010 on New Labour’s public sector
legacy, stating that:
230  A. E. Weiss

For the last decade or so, in the name of modernisation, rationalisation and
efficiency, we have been living under a regime of government by management
consultant and policy by PowerPoint.197

Second, consultants and civil servants—very visibly, given their influence

at the centre of government—worked in tandem and effectively together.
When media commentators somewhat backhandedly commented on Barber’s
team of “ferociously bright and focused young things,” there was no distinc-
tion between those who were consultants and those who were civil servants—
they were working as one.198 Third, even when consultants were—as with the
Delivery Unit—truly working in the heart of government, it is important to
reflect on what they were doing. Their focus was on implementing policy, not
setting it.199 The political decisions had already been made—it was their
responsibility to help them be enacted. Despite the claims of social scientists
that consultancy has “hollowed-out” government power, at least for the
Delivery Unit, the exact opposite is true.200 The Unit helped strengthen, not
weaken, the centre of government. As Barber explained, “the Delivery Unit
was about empowering the bureaucracy – a major aim was to build the skills
and capacity for government to deliver more effectively.”201 The comparison
with local government is pertinent though. In this part of the state, the use of
outsourcing firms more plausibly weakened government powers as internal
competencies such as running in-house IT services were completely lost.
Fourth, the role of path dependency in public sector reform is once again
apparent. Wilson proposed the Delivery Unit on the basis of his experience
with the Efficiency Unit, and the methodology of the Unit came from previ-
ous work in the Department of Education. And fifth, the strength of the
Delivery Unit came from the backing which the Prime Minister gave to it.202
As Jonathan Powell suggested—echoing Machiavelli—reform happens only
when it is led by a strong leader.203 Yet ultimately, many politicians at the time
cared little about what or how this reform was achieved, so long as it was.204
The important work of delivery was left to the consultants and civil servants.

Retrenchment and Consolidation
Politicians of both parties tended to be somewhat in awe of management con-
sultants, with the exception of Francis Maude.205 (Gus O’Donnell, Head of the
Home Civil Service and Cabinet Secretary, 2005–2011)
   Delivering, 1990s–2000s  231

In April 2014, a non-executive director (NED) in a newly formed body

based in the Cabinet Office mused over the rationale for the state’s continued
use of consultants in the august surroundings of HM Treasury on One Horse
Guards’ Road.206 The individual was well placed to comment on the matter.
The position, which was borrowed straight from business practice (non-­
executive director), was concerned with matters which had hitherto been
ignored in government (procurement), and had been formed on the basis of
the recommendations of one business magnate—Sir Philip Green, the owner
of the large retail chain Arcadia—and a consultancy, McKinsey.207 The indi-
vidual had also been a consultant with McKinsey & Company and become an
NED because of the “McKinsey network”; a former McKinsey colleague and
subsequently Conservative Member of Parliament was undertaking pro bono
work for the Shadow Cabinet Minister Francis Maude in 2009 on reforming
government. The future parliamentarian called the prospective NED, and
said, “‘are you interested [in joining as a NED]?’ I wasn’t busy, I said yes and
within a few days I was sitting with Francis Maude, then did the full civil
service application [and joined.]”208 In the view of the NED, despite a marked
reduction in consultancy expenditure by central government departments
since 2010, the state continued to rely on the support of consultants because
it lacked the skills the latter could provide. As the NED analogised: “I can’t
cook. So my wife does it. It’s the same [principle] with consultancy skills.”209
This echoes much of Richard Wilson’s explanation that New Labour were
looking for skills the civil service did not possess.
Yet the consultancy industry experienced a significant downturn in the
wake of the 2008 financial crisis and was particularly hit as the Coalition
embarked on an austerity drive characterised by public sector spending cuts.
So-called discretionary expenditure on consulting services was amongst the
first cuts targeted.210 This had been forecast by other Conservative politicians.
In 2006, the future Health Secretary, Andrew Lansley, attacked how: “the
government have been reaching for management consultants in a desperate
bid to compensate for their management failures.”211 (Though, just like his
Conservative Health Secretary predecessor Keith Joseph who some 30 years
earlier attacked Labour’s use of management consultants—see Chap. 3—
Lansley, ended up spending hundreds of thousands of pounds on McKinsey
once in power.)212
In the Coalition’s first year in office, consultancy expenditure by Whitehall
departments was reduced by one-third.213 Subsequent years continued the
trend. In 2013–2014, the Cabinet Office estimated the annual savings on
consultancy expenditure to total £1.6 billion—more than the entire cost of
running the Cabinet Office and Treasury.214 In order to stay in the market for
232  A. E. Weiss

public sector work, established consultancies forsook financial gain. KPMG

made bids for year-long projects with government departments for just £1 in
2011, and Bain undertook pro bono work in the Department for Education.
As, Alan Downey, KPMG’s Head of Public Sector, explained: “From a com-
mercial perspective we’re hoping the central government market will get bet-
ter in the second half of 2011. It’s not a question of thinking the chequebook
will come out and we’ll go back to the way it was but it will come to a more
moderate level. We wouldn’t do free work permanently. We couldn’t afford to.
We have to make an acceptable return.”215
Despite Francis Maude’s ambitions—alluded to O’Donnell’s comment
above—Downey’s optimism was proved correct. As this book has shown, 45
years of an increasing trend towards the use of consultants would not reverse
overnight. Several developments in the culture and structure of the public
sector had made the continued use of consultants inevitable. Explicit govern-
ment frameworks were set up—some 45 years after the principles underpin-
ning them were proposed by the Treasury—to facilitate the procurement of
consultants.216 The Office of Government Commerce’s 2009 “Buying
Solutions” framework, and 2013 successor, “Consultancy One,” sought to vet
the quality of consultancies and thereby reduce the transaction costs to depart-
ments in hiring consultants by having a “preferred” list of suppliers.217 Whilst
many consultancies experienced a reduction in public sector income, the
development of such procurement routes made explicit that their continued
use was acceptable, so long as it was judicious.
The so-called revolving door between consultants and the public sector also
meant that consultancy ideas, values, and networks of potential consulting
resource were in great abundance; their sheer presence and influence made the
use of consultants more likely. Ian Watmore, who worked as both a consultant
and a civil servant, rationalised that the development of such cross-­sector
thinking was hardly a surprise:

When I joined Andersen we had about 200 consultants – now there are around
12,000. So firstly, the sheer scale of consulting and the numbers of consultants
changed. And second, when I joined Andersen in 1980 the civil service was
perceived as slow, bureaucratic and Sir Humphrey-like (even if it was before Sir
Humphrey was invented). But from the 1980s it went through a major change,
starting with the FMI and Rayner Scrutinies. This was the start of the age of the
“celebrity business reviewer” such as the 1983 Griffiths NHS Review. Gordon
Brown (and Blair before) also made great use of the “celebrity business review”.
But the reforms really started much earlier than people think – most think it
was the 1990s  – and really it started with Thatcher in the 1980s; it was an
   Delivering, 1990s–2000s  233

incredible journey of civil service modernisation. So you get two major things
happening: a huge expansion in consultancy, and a change to be more business-­
like in the civil service. And that really makes it inevitable that you have these
cross-boundary flows.218

Notwithstanding these long-run trends, the number of high-profile figures

in the public eye with consulting backgrounds—William Hague, Leader of
the Conservative Party; John Birt, former Director General at the BBC and
later a “policy guru” to Tony Blair; Adrian Masters, who became the Chief
Executive of Monitor, the body which looked after all NHS Foundation
Trusts—frequently made consultants the subject of front-page headlines.219
For many consultancies, this provided an excellent marketing opportunity.
Indeed, little had changed since the 1970s, when Barry Hedley recalled that
BCG was relaxed with the media furore surrounding its report on the motor-
cycle industry for the Department of Industry.220 Also helping to spread the
influence of consultancies was that those who had worked in the public sector
for consultancies would often go on to form their own consultancies, thereby
facilitating the supply of further consultants. For instance, 2020 Delivery, a
consultancy focused on clients undertaking public service work, was formed in
2006 by two former members of the PMDU.221 The credibility and connec-
tions these individuals had gained in the Delivery Unit undoubtedly helped
win work within the public sector, as the name of the Delivery Unit resonated
positively with prospective clients. These networks were self-perpetuating.
Whilst the Coalition government did manage to curb spending on consul-
tants in central government, expenditure continued to expand in the “deliv-
ery” parts of the state: local authorities, the NHS, and arms-length bodies.222
This is explained by the different elements of the British state. Whilst the
executive state—via spending controls in the Treasury and Cabinet Office—
could dictate to central government departments how they spend their money,
the delivery parts of the state had a weaker connection to the executive which
could not mandate in such a way. Ever since the Next Steps report, for
instance, arms-length bodies were granted a degree of fiscal autonomy which
was not afforded to government departments—they were consequently freer
to spend on consultants as they chose.223
What the public sector spent on consultants had changed in nature since the
emergence of consultancy in the state in the 1960s. As project management
skills became more commonplace throughout the public sector (though, as the
quote at the start of this section attests to—not necessarily highly valued), the
longer, more traditional “operational” types of work of consultants became less
frequent. As a Financial Times report on the “business of consulting” highlighted
234  A. E. Weiss

in 2014, consulting engagements became smaller and more specialised.224 In the

1980s, by contrast, Arthur Andersen undertook a “front-­end” diagnostic study
for the Operational Strategy (see Chap. 4) as well as a multi-year “back-end”
implementation project. Yet by the 2010s, such work was rare, with consultants
more likely to be called in to provide discrete, specialised advice, such as consult-
ing on “digital transformation strategies” whilst not necessarily undertaking the
work themselves.225 In practice, this meant the consulting market became even
more fragmented. The bigger firms consolidated, Monitor and Booz & Company
were acquired by competitors and maintained high consulting rates, whilst
smaller, more niche firms emerged which could offer lower day rates due to
lower overheads, and often would be staffed with former consultants from the
larger firms.226 In terms of the types of work undertaken, the size of firms, and
fees offered, the market had never looked more diverse.
Global economic factors and their impact on public sector pay benefited
consultants, though. In the late 2000s, as pay was restrained in the face of the
Coalition’s austerity policy, fewer individuals transferred from the private to
public sector, thereby also reducing this mode of skills transfer.227 As the gap
between private and public sector pay at senior levels increased (public sector
posts received between 30 and 64 per cent of comparable private sector ones),
it became unattractive to make the change. Twenty-three per cent of senior
civil servants moved from the private sector in 2004, and this figure dropped
to only 9 per cent in 2012.228 As buying-in private sector skills on a perma-
nent basis became harder to do, doing so on a temporary basis remained a
viable alternative, to the continued benefit of consultants.

The Competencies of the Modern State

There’s a pervasive view in Whitehall that those who do are below the salt, while
those who think are above the salt. (Attributed to civil servants)229

A 2014 review by the Public Administration Select Committee briefly

touched upon the impact of the use of consultants by the state. Lord Adonis, a
Minister in Tony Blair’s governments, reflected with disdain as to how “the rou-
tine use of consultants has, to a substantial extent, deprofessionalised the Civil
Service. You can reach for McKinsey or whomever, and therefore you do not
need to inculcate financial management, project management and other skills in
civil servants.”230 The quote at the start of this section echoes Adonis’ frustra-
tion. When asked to explain the growth of consultants under his tenure as Head
of the Home Civil Service, Gus O’Donnell volunteered similar thoughts:
   Delivering, 1990s–2000s  235

I have never been a fan of the long-term use of management consultants. If real
skills are needed in the long-term then they should be built and brought in-­
house. But if you need them in the short-term, then I think it is fine to get
[consultants] in. What are the skills deficit that we have? Commercial, negotiat-
ing and commissioning. Why? Because the private sector pays loads of money
to people with these skills. And so it’s better to pay in the short-term for these
skills. I’m in favour of paying.231

This broadly pragmatic and economic view is understandable, particularly

where the boundaries between public and private actors working for the state
had broken down. Yet the question remains as to why, despite the huge moves
by the state towards developing private sector–style skills, to the extent that in
2015 one could walk into any prison, school, local authority, or central gov-
ernment department and hear talk of service-level agreements, performance
targets and digital aspiration, the skills O’Donnell mentioned did not exist
within the civil service.232 This question lies at the heart of the growth of pub-
lic sector consulting since the 1990s. The answer is twofold. First, manage-
ment consultants had, over the past 50 years, demonstrated they were capable
of working in tandem with the public sector to provide these skills. And sec-
ond, as the state relied more and more on consultants, these skills—or, to
borrow Porter’s phrase again, “core competencies”—were either lost or never
developed by the state, so that turning to outside help was the only option
available in an era when such private sector skills were highly prized in the
“hybrid state.”233

Notes
1. “Tony Blair’s victory speech,” The Guardian, June 8, 2001, accessed April
11, 2015, http://www.theguardian.com/politics/2001/jun/08/election2001.
electionspast1
2. Chris Giles, “Former civil service chief to champion corporate clients,” The
Financial Times, July 28, 2013, accessed April 11, 2015, http://www.ft.com/
cms/s/0/976e0bd2-f605-11e2-8388-00144feabdc0.html?siteedition=uk#ax
zz2aRXqig6J; Helen Crane, “Lord O’Donnell to advise corporates on eco-
nomic policy,” The Guardian, July 30, 2013, accessed April 11, 2015, http://
www.theguardian.com/public-leaders-network/2013/jul/30/lord-gus-odon-
nell-frontier-economics; Tim Smedley, “Gus O’Donnell,” The Financial
Times, January 28, 2015, accessed April 11, 2015, http://www.ft.com/cms/
s/0/85ca2592-975c-11e4-845a-00144feabdc0.html#axzz3VKanzcl9
236  A. E. Weiss

3. Paul Revoir, “Former Labour Minister lands £300,000 BBC job,” Daily
Mail, February 15, 2013, accessed April 11, 2015, http://www.dailymail.
co.uk/news/article-2278944/Former-Labour-minister-lands-300-000-
BBC-job-James-Purnell-faces-accusations-bias.html
4. Peter Wilby, “Mad professor goes global,” The Guardian, June 14, 2011,
accessed April 11, 2015, http://www.theguardian.com/education/2011/
jun/14/michael-barber-education-guru
5. The extended use of consultants by the state in this period provides a com-
pelling example of the transmission of private sector ideas to the public
sector.
6. HoC Public Administration Select Committee, Truth to power (London:
The Stationery Office Limited, 2013), 30.
7. “The management consultancy scam,” The Independent; “Masters of illu-
sion,” The Independent; “Public sector ‘to recruit 200 consultants on up to
£1000 a day’”, The Daily Telegraph, July 5, 2010.
8. Angela Jameson, “Buyout led to £1bn back-office empire,” The Times, April
14, 2004; as claimed by Denis Healey. Cited in Craig and Brooks, Plundering
the Public Sector, 24.
9. The company was also called Grabita by a Member of Parliament sitting on
the Commons Public Accounts Committee, cited in Angela Jameson,
“Buyout led to £1bn back-office empire.”
10. Audit Commission, Reaching the Peak? Getting Value for Money from
Management Consultants (London: HMSO, 1994), 5. The Commission
concluded that consultants were commonly used for fifteen distinct types of
support.
11. John Major, conversation with author at Churchill College, University of
Cambridge, November 26, 2010. See Appendix 1 for biography.
12. The public’s ability to comprehend large expenditures (e.g. the difference
between £500,000, £1 billion, or £20 billion) was something Tony Blair
reflected on in his memoirs, Tony Blair, A Journey (London: Hutchinson,
2010), 334.
13. Major, John Major.
14. Ibid., 690; for more on the “McKinsey mafia” and the use of the term, see
Jenkins, Thatcher and Sons, 277.
15. See for instance the memoirs of Jack Straw, Michael Heseltine, or Peter
Mandelson. Details cited in subsequent endnotes.
16. Christopher Pollitt, “30 Years of Public Management Reforms: Has There
Been a Pattern?”, World Bank blog, May 5, 2011, accessed April 11, 2015,
http://blogs.worldbank.org/governance/30-years-of-public-management-
reforms-has-there-been-a-pattern; see Saint-Martin, Building the New
Managerialist State.
17. Milan Kubr, Management Consulting: A Guide to the Profession, 2nd impr.
with modifications (Geneva: International Labour Office, 1977), 11.
   Delivering, 1990s–2000s  237

18. See Burton, The Politics of Public Sector Reform.

19. Jenkins, Thatcher and Sons, 277.
20. See King, The Blunders of Our Governments.
21. See Barber, Instruction to Deliver; Kate Jenkins, Politicians and Public Services
(Cheltenham: Edward Elgar, 2008); Campbell-Smith, Follow the Money.
22. Barber, Instruction to Deliver, 111.
23. For the PowerPoint slides used in the Delivery Unit, see the appendices in
ibid., 417–27.
24. Cabinet Office, Government ICT strategy: smarter, cheaper, greener (London:
HMSO, 2010).
25. Thatcher, The Downing Street Years, 676.
26. Rowena Crawford et al., A Survey of Public Spending in the UK (London:
Institute for Fiscal Studies, 2009), 2; see Jenkins, Thatcher and Sons, 154.
27. “Margaret Thatcher speech at Kensington Town Hall.” January 19, 1976.
Margaret Thatcher Foundation, accessed April 11, 2015, http://www.mar-
garetthatcher.org/document/102939
28. See Jenkins, Thatcher and Sons, 30; ibid., 42.
29. TNA: CAB 129/193. “IMF Negotiations”. Memorandum by the Chancellor
of the Exchequer, November 22, 1976.
30. See Chap. 4.
31. Joe Moran, “Defining Moments: Denis Healey agrees to the demands of
the IMF,” Financial Times, September 4, 2010, accessed April 11, 2015,
http://www.ft.com/cms/s/2/11484844-b565-11df-9af8-00144feabdc0.
html#axzz3VTjSig7Q
32. For more on the strike, see John Shepherd, Crisis? What Crisis?: The Callaghan
Government and the British ‘Winter of Discontent’ (Manchester: Manchester
University Press, 2013).
33. Nicholas Timmins, The Five Giants, 366.
34. Ibid., 312.
35. O’Hara, From dreams to disillusionment, 218.
36. See Chap. 4.
37. Hennessy, Whitehall, 605.
38. Jenkins, Politicians and Public Services, 141.
39. John Guinness, interview with author, Brooks’s Club, Pall Mall, January 19,
2011. See Appendix 1 for biography.
40. Peter Walters, interview with author, BP Chairman’s Office, Mayfair,
November 10, 2011.
41. McKenna, World’s Newest Profession, 165–91; Matthias Kipping, “American
Management Consulting Companies in Western Europe”; Zeitlin and
Herrigel, Americanization and Its Limits.
42. Francis X. Cline, “Reagan Denounces Ideology of Soviet as ‘Focus of Evil’”,
The New York Times, March 9, 1983, accessed April 22, 2015, http://www.
nytimes.com/1983/03/09/us/reagan-denounces-ideology-of-soviet-as-
238  A. E. Weiss

focus-of-evil.html; Thomas J. Peters and Robert H. Waterman, In Search of

Excellence: Lessons from America’s Best-Run Companies, New ed. (London:
Profile, 2004).
43. McKenna, World’s Newest Profession, 192.
44. See Tom Gash, Julian McCrae, and Jonathan McClory, “Transforming
Whitehall departments: Evaluation Methodology”, Institute for Government,
June 2011, 6.
45. The empiricism of the book was, however, heavily criticised. See Stefan
Stern, “Lunch with the FT: Tom Peters,” Financial Times, November 21,
2008.
46. John Corry, “‘In search of excellence,’ on PBS,” The New York Times, January
16, 2015, accessed April 11, 2015, http://www.nytimes.com/1985/01/16/
arts/in-search-of-excellence-on-pbs.html
47. George Nesterczuk, “Reviewing the National Performance Review”,
Regulation, no. 3 (1996): 31.
48. David Osborne and Ted Gaebler, Reinventing Government: How the
Entrepreneurial Spirit Is Transforming the Public Sector (Reading, Mass.:
Addison-Wesley Pub. Co, 1992).
49. Ibid., jacket.
50. Ibid.
51. Ibid., 21.
52. Of course, the Soviet Union too had its own forms of administrative prac-
tice—focusing on five-year plans with ambitious aims. The counterfactual
of an alternative Cold War outcome is fascinating. Though there is some
evidence to suggest that something akin to the “New Public Management”
may have emerged regardless—scientific management techniques were cer-
tainly used in 1970s USSR. See Daniel A. Wren, “Scientific Management in
the U.S.S.R.  With Particular Reference to the Contribution of Walter
N. Polakov”, The Academy of Management Review, Vol. 5 No. 1 (1980).
53. Albert Gore, Businesslike Government: Lessons Learned from America’s Best
Companies (Washington, D.C.: National Performance Review, 1997), 7.
54. For more on wars, technology, and the so-called military-industrial-­academic
complex, see Stuart W.  Leslie, The Cold War and American Science: The
Military-Industrial-Academic Complex at MIT and Stanford (New York;
Oxford: Columbia University Press, 1993).
55. Peter A.  Clark and Jacky Swan, Organizational Innovation: Process and
Technology (London: Sage, 2002), 158. The international comparison work
by Accenture in 2008, for example, would not have been possible without
data processing power and international data, transmitted across countries.
See Accenture, “Report for the National Audit Office: An International
Comparison of the United Kingdom’s Public Administration”, National
Audit Office, October 22, 2008.
   Delivering, 1990s–2000s  239

56. Management Consultancies Association, Comparing consulting in the UK

public and private sectors: Part of the MCA’s 2010 Industry Research Programme
(London: MCA, 2010).
57. James P.  Womack, Daniel T.  Jones, and Daniel Roos, The Machine That
Changed the World: The Story of Lean Production – Toyota’s Secret Weapon in
the Global Car Wars That Is Revolutionizing World Industry, New ed. (London:
Simon & Schuster, 2007).
58. See TNA: FCO 21/1278. “Study by Boston Consulting Group on the
future of Japan.” 1974; Richard J.  Schonberger, Japanese Manufacturing
Techniques: Nine Hidden Lessons in Simplicity (London: Collier Macmillan,
1982).
59. “Deming’s 1950 Lecture to Japanese Management”, translation by Teruhide
Haga, accessed April 12, 2015, http://hclectures.blogspot.co.uk/1970/08/
demings-1950-lecture-to-japanese.html; M.L.  Emiliani, “Origins of lean
management in America: The role of Connecticut businesses”, Journal of
Management History 12, no. 2 (2006): 167–184.
60. See “NHS Institute for Innovation and Improvement”, accessed April 12,
2015, http://www.institute.nhs.uk/building_capability/general/lean_think-
ing.html
61. See Michael Barzelay, The New Public Management: Improving Research and
Policy Dialogue (Berkeley, Calif.: University of California Press, 2001);
Christopher Pollitt, “30 Years of Public Management Reforms: Has There
Been a Pattern?”.
62. Ibid., 2.
63. See Anthony Giddens, The Third Way: The Renewal of Social Democracy
(Cambridge: Polity Press, 1998); Peter Mandelson and Roger Liddle, The
Blair Revolution: Can New Labour Deliver? (London: Faber, 1996).
64. Burton, The Politics of Public Sector Reform, 26; in Jenkins, Thatcher and
Sons, 198, it is claimed that consultants “clustered around the Citizen’s
Charter.”
65. Quoted in Nirmala Rao and Ken Young, Local Government since 1945
(Oxford: Blackwell, 1997), 259.
66. Anne Mellbye, “A brief history of the third way,” The Guardian, February
10, 2003, accessed April 12, 2015, http://www.theguardian.com/poli-
tics/2003/feb/10/labour.uk1
67. See “Repeals”, House of Commons debate, March 17, 1999, vol
327 cc1202–30.
68. Blair, A Journey, 338.
69. Toby Helm and Bruno Waterfield, “Tony Blair to earn £2 million a year as
JP Morgan adviser,” January 11, 2008, accessed July 9, 2015, http://www.
telegraph.co.uk/news/politics/labour/1575247/Tony-Blair-to-earn-2m-as-
JP-Morgan-adviser.html
240  A. E. Weiss

70. John Micklethwait and Adrian Wooldridge, The Witch Doctors: What the
Management Gurus Are Saying, Why It Matters and How to Make Sense of It
(London: Heinemann, 1996), 315.
71. Gill Plimmer, “Capita chief outsources himself after 26  years,” Financial
Times, November 18, 2013.
72. NAO, The role of major contractors in the delivery of public services (London:
HMSO, 2013).
73. “Workforce”, Institute for Government, last accessed 12 April 2015, www.
instituteforgovernment.org.uk/workforce
74. 2020 Public Services Trust, What do people want, need and expect from public
services? (London: Ipsos Mori, 2010), 8.
75. See John Clarke, Creating Citizen-Consumers: Changing Publics & Changing
Public Services (London: SAGE, 2007), 128.
76. Peter John and Mark Johnson, “Is there still a public service ethos?” in
A. Park, J. Curtice, K. Thomson, M. Phillips, M. Johnson, and E. Clery,
eds., British Social Attitudes: the 24th Report (London: Sage, 2008),
105–125.
77. The same point about the historical continuities of public-private partner-
ships has been made with reference to the United States in a compelling
manner in Jody Freeman and Martha Minow, Government by Contract:
Outsourcing and American Democracy (Cambridge, Mass.; London: Harvard
University Press, 2009), 32.
78. Ian Watmore, telephone interview with author, February 12, 2014.
79. Management Consultancies Association annual reports, 2006 to 2012.
80. See Kipping and Clark, The Oxford Handbook of Management Consulting.
81. For more on privatisation, see the excellent David September Parker, The
Official History of Privatisation (Abingdon: Routledge, 2009).
82. NAO, Delivery of public services, 26.
83. Rao and Young, Local Government, 255.
84. Ibid., 2.
85. Ibid., 256.
86. Campbell-Smith, Follow the Money, 255–61.
87. Rich Benton, telephone interview with author, September 29, 2014. See
Appendix 1 for biography.
88. “Capita to capitalize on council poll tax,” The Times, May 16, 1988.
89. Philip Pangalos, “Capita the USM champion firm goes marching on,” The
Times, March 11, 1991.
90. Michael Clark, “Capita on poll-tax alert,” The Times, November 13, 1989.
91. Rich Benton, interview with author, September 29, 2014.
92. Ibid.
93. “Capita builds on council link,” The Evening Standard, September 21, 1998;
Bill Roots’ background noted in “South West London Joint Health Overview
   Delivering, 1990s–2000s  241

and Scrutiny Committee on NHS Croydon Finances.” Minutes of meeting

held on Thursday 6 September 2012.
94. Rao and Young, Local Government since 1945, 258.
95. Ibid.; “Private man who is big in public sector”, The Sunday Times, September
16, 2001; “Barnet to be run from Belfast after Capita wins council deal,”
National Edition, November 23, 2012.
96. Campbell-Smith, Follow the Money, 41.
97. Ibid., 152–53.
98. Osborne and Gaebler, Reinventing Government.
99. Ibid., 49.
100. Audit Commission, Preparing for Compulsory Competition, Occasional
Papers Number 7 (January 1989); Audit Commission, Reaching the Peak?
Getting Value for Money from Management Consultants (London: HMSO,
1994).
101. J. A. Chandler, Explaining Local Government: Local Government in Britain
since 1800 (Manchester: Manchester University Press, 2007), 289.
102. Ruth Kelly did defend the general practice to the House of Commons in
2004, but this was a more general endorsement of the business function
rather than its application to government. “Directgov”. House of Commons
debate, September 15, 2004, vol 424 cc1588- 9 W 1588 W.
103. Michael Heseltine, Life in the Jungle: My Autobiography (London: Hodder &
Stoughton, 2000), 206; Thatcher, The Downing Street Years.
104. Blair, A Journey.
105. Rich Benton, interview with author, September 29, 2014.
106. Ibid.
107. George Jones, “Taxpayer faces bill for cleaning up politics,” The Times,
March 21, 2006.
108. Simon Bowers, “Capita,” The Guardian, November 19, 2010; Alan Travis,
“Grayling awards Capita six-year UK electronic tagging contract”; The
Guardian, July 15, 2014. The tagging contract was delivered in tandem with
Airbus Defence and Space (for satellite mapping), Telefonica (for the com-
munications network management), and Steatite (for manufacturing and
providing GPS tracking tags)—a clear example of the multiplicity of private
providers working on hitherto state services.
109. Polly Curtis, “The CRB explained,” The Guardian, December 17, 2003.
110. Tony Blair, 1995 Labour Party Leader’s Speech, Brighton, accessed July 7, 2015:
http://www.britishpoliticalspeech.org/speech-archive.htm?speech=201
111. House of Commons debate, Criminal Records Bureau, December 14,
1998 vol 595 cc123-4WA.
112. National Audit Office, Criminal Records Bureau, HoC 266 Session 2003–
2004, February 12, 2004, 22.
113. Ibid.
114. NAO, Criminal Records Bureau, 29.
242  A. E. Weiss

115. See Frank Furedi and Jennie Bristow, Licensed to Hug: How Child Protection
Policies Are Poisoning the Relationship between the Generations and Damaging
the Voluntary Sector, 2nd ed. (London: Civitas, 2010), 5.
116. House of Lords Debate, June 16, 2003, col. 522, “Criminal Records Bureau:
Payments to Capita.”
117. Charlotte Jee, “Home Office to replace Capita with another supplier for new
DBS service,” Government Computing, October 3, 2012, accessed July 7,
2015, http://central-government.governmentcomputing.com/news/home-
office-to-replace-capita-with-another-supplier-for-new-dbs-service
118. Derek du Preez, “Tata picks up government CRB contract for £100 m less that
estimated,” Computerworld UK, November 27, 2012, accessed July 7, 2015,
http://www.computerworlduk.com/news/it-vendors/tata-picks-up-govern-
ment-crb-contract-for-100m-less-than-estimated-3413297/
119. “Capita to be given access to police and criminal records,” May 15, 2003,
Public Finance, accessed July 7, 2015, http://www.publicfinance.co.uk/
news/2003/05/capita-be-given-access-police-and-criminal-records
120. “Criminal Records Bureau Contract Update,” Capita plc press release,
October 3, 2012, accessed July 7, 2015, http://www.capita.co.uk/news-and-
opinion/news/2012/julydec/criminal-records-bureau-update.aspx
121. Geoff Foster, “Market Report: Capita chief is facing crisis over another lost
contract,” MailOnline, October 3, 2012, accessed July 7, 2015, http://www.
thisismoney.co.uk/money/markets/article-2212537/MARKET-REPORT-
Capita-chief-facing-crisis-lost-contract.html
122. David Hencke, “Records bureau fiasco damned by watchdog,” The Guardian,
February 12, 2004, accessed October 10, 2015, http://www.theguardian.
com/politics/2004/feb/12/schools.ukcrime
123. Rich Benton, interview with author, September 29, 2014.
124. Kate Jenkins is particularly good on how earlier “contract management”
work focused solely on inputs, not outcome-based measures, and faced con-
siderable scepticism. See Jenkins, Politicians and Public Services, 53; Other
major competitors Capita faced included ITNET, ICL, Coopers & Lybrand,
EDS, Serco, and Capgemini. Author interview with Rich Benton.
125. David Gladstone, Before Beveridge: Welfare before the Welfare State (London:
Civitas, 1999), 34.
126. National Audit Office, Private Finance Projects (London: NAO, 2009), 19.
127. “Outsourcing,” The Economist, September 21, 2008.
128. Review of Hansard, accessed April 12, 2015, http://hansard.millbanksys-
tems.com/
129. For examples of the process of bringing back in-house services, see
Association for Public Service Excellence, “Insourcing: A guide to bringing
local authority services back in-house”, APSE, 2009.
130. Lis Astall, interview with author, Institute of Directors, Pall Mall, March 9,
2016. See Appendix 1 for biography.
   Delivering, 1990s–2000s  243

131. HoC debate, Privately Managed Prisons, June 30, 1997, vol 297 cc11-2W.
132. Gill Plimmer, “UK outsourcing spend doubles to £88bn under coalition,”
Financial Times, July 6, 2014, accessed April 12, 2015, http://www.ft.com/
cms/s/0/c9330150-0364-11e4-9195-00144feab7de.html#axzz3Sw4tZ5vq
133. “MPs top the list for least respected profession, say Today listeners,” BBC
News, May 29, 2001, accessed April 12, 2015, http://www.bbc.co.uk/pres-
soffice/pressreleases/stories/2002/05_may/29/respected_profession.shtml;
For more on professionals in British society, see Harold James Perkin, The
Rise of Professional Society: England since 1880 (London: Routledge, 1989).
134. With a focus on films and more internationalist in outlook see Nikil Saval,
Cubed: A Secret History of the Workplace, First edition. (New York: Doubleday,
2014), 2, which makes a similar point regarding the mockery of “manage-
ment” in popular culture.
135. “The Investment Column: Microsoft Link Is Heady News for Capita,” The
Times, February 23, 2000.
136. Gill Plimmer, “Outsourcing urged to alleviate austerity,” Financial Times,
August 23, 2011, accessed April 12, 2015, http://www.ft.com/cms/s/0/
c6e2d204-cd70-11e0-b267-00144feabdc0.html?siteedition=uk#axzz3UC6
m9AQm
137. “Out of the mouth of Blair,” The Guardian, April 26, 2002, accessed April
12, 2015, http://www.theguardian.com/politics/2002/apr/26/fiveyearsofla-
bour.labour6
138. Barber, Instruction to Deliver, 47.
139. Peter Mandelson, The Third Man: Life at the Heart of New Labour (London:
HarperPress, 2010), 337.
140. Blair, A Journey, 272.
141. Richard Crossman suggested Harold Wilson cared passionately about
implementing large parts of the Fulton Report for a desire to appear as a
“great moderniser.” Crossman and Howard, The Crossman Diaries: 1964–
1970, diary entry for June 20, 1968, 506.
142. Michael Barber, telephone interview with author, April 17, 2015. See
Appendix 1 for biography.
143. “Mad professor goes global,” The Guardian; A. W. Bradley and K. D. Ewing,
Constitutional and Administrative Law, 13th ed. (Harlow: Longman, 2003),
279–80.
144. “Third PPC publicly denies Blair donation,” labourlist, March 10, 2015,
accessed July 9, 2015, http://labourlist.org/2015/03/third-ppc-publicly-
declines-blair-donation/
145. Barber, Instruction to Deliver, xvi.
146. Ibid., 43.
147. Cited in Patrick Diamond, Governing Britain: Power, Politics and the Prime
Minister (London: I.B. Tauris, 2014), 233.
148. Ibid., 234.
244  A. E. Weiss

149. Blair, A Journey, 271.

150. Martin Kettle, “Tony Blair interview: the full transcript,” the Guardian,
September 1, 2010, accessed November 19, 2015, http://www.theguardian.
com/politics/2010/sep/01/tony-blair-interview-full-transcript
151. Ibid.
152. “Blair’s case for radical change,” the Guardian, September 27, 2002, accessed
November 19, 2015, http://www.theguardian.com/society/2002/sep/27/
publicservices.labour2002
153. Ibid.
154. For more on the transfer of power towards “citizen-consumers” see John
Clarke, Creating Citizen-Consumers: Changing Publics & Changing Public
Services (London: SAGE, 2007), 31.
155. “Full text of Tony Blair’s speech,” the Guardian, January 29, 2004, accessed
November 19, 2015, http://www.theguardian.com/society/2004/jan/29/
comment.publicservices
156. Cited in Eric Shaw, “The Meaning of Modernisation: New Labour and pub-
lic sector reform” in In Search of Social Democracy: Responses to crisis and
modernisation, eds. J. Callaghan et al. (Manchester: Manchester University
Press, 2009), 147–167.
157. Julian Le Grand, “The Blair legacy? Choice and Competition in Public
Services” (Transcript of Public Lecture, LSE, February 21, 2006).
Highlighting Le Grand’s importance to the New Labour approach, Michael
Barber described him in his memoirs as “extremely talented and highly
influential.” Cited Barber, Instruction to Deliver, 54.
158. Cited in Shaw, “The Meaning of Modernisation” in In Search of Social
Democracy: Responses to crisis and modernisation, 147–167.
159. Ibid.
160. Quote from Richard Titmuss, cited in Perkin, The Rise of Professional Society,
14.
161. Jenkins, Thatcher and Sons, 277; Jenkins’ attempt to downplay Blair’s
involvement requires contextualisation)—on Blair’s resignation, the journal-
ist argued that the ideological significance of Blair was weak, and that “Blair’s
term in Downing Street has been the continuance of an ideological narrative
that began in 1979, not 1997…he has had a rock, he has had an ideology. It
was Thatcherism.” See Simon Jenkins, “No Such Thing as Blairism,” The
Huffington Post, April 25, 2007, accessed July 9, 2015, http://www.huffing-
tonpost.com/simon-jenkins/no-such-thing-as-blairism_b_46843.html
162. Ibid.
163. Barber, Instruction to Deliver, 48; In 2003–2004, for instance, PMDU had
an annual budget of £3.8 million. HoC debate, Civil Service, November 19,
2003, vol 413 cc877-8W 877W; See Cabinet Office, Modern Public Services
for Britain: Investing in Reform. Comprehensive Spending Review: New Public
Spending Plans 1999–2002, London: The Stationery Office, July 1998.
   Delivering, 1990s–2000s  245

164. Blair, A Journey, 338–39.

165. “Civil Service.” Mr Alexander to Norman Lamb. HoC debate, November
19, 2003 vol 413 cc877-8W.
166. Barber, Instruction to Deliver, 38.
167. Ibid., 39.
168. Richard Wilson, interview with author, March 6, 2014.
169. HoC debate, Modernising Government White Paper, December 9, 1999, vol
340 cc281-326WH.
170. Richard Wilson, interview with author, March 6, 2014.
171. NAO, Measuring the Performance of Government Departments: Report by the
Comptroller and Auditor General (London: NAO, 2001), 1.
172. Micklethwait and Wooldridge, The Witch Doctors, 315.
173. Barber, Instruction to Deliver, 43.
174. Ibid., 102.
175. Ibid., 76–85.
176. Former management consultant and Delivery Unit member, anonymous,
interview with author, London, August 1, 2011; Matt Keating, “Is the hired
help just a rip-off?,” The Guardian, October 22, 2005, accessed April 12,
2015, http://www.theguardian.com/money/2005/oct/22/careers.work3
177. NAO, Central government’s use of consultants: Methodology (London: NAO,
2006), 11.
178. Barber, Instruction to Deliver, 53.
179. Richard Wilson, interview with author, March 6, 2014.
180. Quentin Letts, “Mr Blair relies on the men in white coats,” The Telegraph,
August 3, 2003, accessed April 12, 2015, http://www.telegraph.co.uk/com-
ment/personal-view/3594565/Mr-Blair-relies-on-the-men-in-white-coats.
html; “Targets can kill,” The Telegraph, April 10, 2005, accessed April 12, 2015,
http://www.telegraph.co.uk/comment/telegraph-view/3616113/Targets-can-
kill.html
181. Cited in Barber, Instruction to Deliver: Fighting to Transform Britain’s Public
Services, 261; “Driving Performance through Center of Government
Delivery Units”, Global Expert Team, November 2010; How to Run a
Government: So That Citizens Benefit and Taxpayers Don’t Go Crazy (London:
Allen Lane, 2015), xvii–xx.
182. David Graeber, The Utopia of Rules: On Technology, Stupidity, and the Secret
Joys of Bureaucracy (London: Melville House, 2015), 150.
183. This development was covered in much of Chapter 2 of the House of Lords
Select Committee on the Constitution, “The Cabinet Office and the Centre
of Government” (4th Report of the Session 2009–10).
184. For more on information asymmetry see George A. Akerlof, “The Market
for ‘Lemons’: Quality Uncertainty and the Market Mechanism”, Quarterly
Journal of Economics 84, no. 3 (1970): 488–500.
185. Barber, Instruction to Deliver, 85–86.
246  A. E. Weiss

186. See House of Lords, “The Cabinet Office”, 9.

187. John Birt, interview with author in House of Lords, May 11, 2015. See
Appendix 1 for biography.
188. House of Lords, “The Cabinet Office”, 14; an earlier report in The Economist
in fact presaged this, and warned of its dangers. “The new centre,” The
Economist, January 17, 2002.
189. Nicholas Timmins, “Whitehall performance has a long way to go,” Financial
Times, May 12, 2008, accessed April 12, 2015, http://www.ft.com/cms/s/0/
a0da115e-1fbc-11dd-9216-000077b07658.html#axzz3Sw4tZ5vq
190. “Blair’s delivery unit will return under Labour,” The Independent, September
8, 2014; “New Whitehall style guide bans jargon,” The Telegraph, July 25,
2013, accessed April 12, 2015, http://www.telegraph.co.uk/news/poli-
tics/10201134/New-Whitehall-style-guide-bans-jargon.html
191. NAO, “The Performance of the Cabinet Office 2013–14”, November 2014, 23.
192. Barber, How to Run a Government, xviii.
193. George Parker and Sarah Neville, “Supermac returns to haunt David
Cameron,” Financial Times, June 16, 2014, accessed April 12, 2015,
http://www.ft.com/cms/s/0/06488ba2-f567-11e3-afd3-00144feabdc0.
html#axzz3WupzMQGc
194. For more on the “Garden Suburb”, see Hennessy, Whitehall, 66–68.
195. NAO, Central government’s use of consultants, 5; the workings of the Strategy
Unit are covered in Geoff Mulgan, The Art of Public Strategy: Mobilizing
Power and Knowledge for the Common Good (Oxford: Oxford University
Press, 2009), 127–28.
196. Richard Willson, The Times, August 18, 1999.
197. Rosa Prince, The Daily Telegraph, May 12, 2008, accessed July 17, 2014,
http://www.telegraph.co.uk/news/politics/labour/1950578/Labour-Tory-
leader-David-Cameron-attacks-Labours-policy-by-PowerPoint.html
198. Simon Caulkin, “It takes more than Mr Targets to get results,” The Guardian,
July 8, 2007, accessed April 12, 2015, http://www.theguardian.com/soci-
ety/2007/jul/08/futureforpublicservices.business
199. Although Barber has since argued that good government is 10 per cent pol-
icy and 90 per cent implementation, a view which highlights that the impor-
tance of delivery to state power should not be overlooked. “How to Run a
Government.” Michael Barber in conversation, LSE, March 16, 2015.
200. For more on this debate, see Dennis Kavanagh et al., British Politics (Oxford:
Oxford University Press, 2006), 53–63.
201. Michael Barber, interview with author, April 17, 2015.
202. “How to Run a Government.” Michael Barber in conversation at the LSE.
203. Powell quote in Diamond, Governing Britain, 234.
204. See for instance Jack Straw, Last Man Standing: Memoirs of a Political
Survivor (London: Macmillan, 2012); David Blunkett, The Blunkett Tapes:
My Life in the Bear Pit (London: Bloomsbury, 2006).
205. Gus O’Donnell, correspondence with author, August 31, 2015.
   Delivering, 1990s–2000s  247

206. Cabinet Office non-executive director, anonymous, interview with author,

London, October 30, 2014.
207. Sarah Neville, “Business-style agency to run £12bn of government pro-
curement,” Financial Times, July 23, 2013, accessed April 12, 2015,
http://www.ft.com/cms/s/0/31c6a8e8-f380-11e2-942f-00144feabdc0.
html#axzz3Sw4tZ5vq
208. Cabinet Office non-executive director, anonymous, interview with author,
October 30, 2014.
209. Ibid.
210. Christopher Hope, “Government spends tens of millions on consultants,
advertising and marketing despite crackdown,” The Telegraph, December 16,
2010, accessed April 12, 2015, http://www.telegraph.co.uk/news/poli-
tics/8204842/Government-spends-tens-of-millions-on-consultants-
advertising-and-marketing-despite-crackdown.html
211. Quoted in NAO, Central government’s use of consultants: Market analysis,
(London: NAO, 2006), 65.
212. Daniel Boffey, “NHS reforms: American consultancy McKinsey in conflict-­
of-­interest row,” The Guardian, November 5, 2011, accessed April 12, 2015,
http://www.theguardian.com/society/2011/nov/05/nhs-reforms-mckinsey-
conflict-interest
213. Gill Plimmer, “Whitehall cuts consultancy bill by a third,” Financial Times,
May 1, 2011, accessed April 12, 2015, http://www.ft.com/cms/s/0/4dcc56c4-
7433-11e0-b788-00144feabdc0.html#axzz3Sw4tZ5vq
214. NAO, The 2013–14 savings reported by the Efficiency and Reform Group:
Report by the Comptroller and Auditor General (London: NAO, 2014), 17;
NAO, The centre of government: Report by the Comptroller and Auditor General
(London: NAO, 2014), 14–16.
215. Polly Curtis, “Whitehall supplier offers year’s worth of free contracts while
times are tough,” The Guardian, January 2, 2011, accessed 12 April 12, 2015,
http://www.theguardian.com/politics/2011/jan/02/kpmg-government-sup-
plier-contracts-consultancy; Rajeev Syal, “Michael Gove appoints manage-
ment consultant to oversee education cuts,” The Guardian, February 14,
2013, accessed April 12, 2015, http://www.theguardian.com/politics/2013/
feb/14/michael-gove-us-consultancy-education-cuts
216. See Chap. 2.
217. Peter Smith, “ConsultancyONE,” Spend Matters UK/Europe, February 14,
2013, accessed 12 April 2015, http://spendmatters.com/uk/consultancy-
one-framework-contract-for-government-consultancy-services-awarded/
218. Ian Watmore, interview with author, February 12, 2014.
219. Cathy Newman, “Birt quits McKinsey amid conflict of interest concerns,”
Financial Times, July 13, 2005, accessed April 12, 2015, http://www.ft.com/
cms/s/0/47f5b0ee-f33b-11d9-843f-00000e2511c8.html#axzz3Sw4tZ5vq
220. Barry Hedley, interview with author, March 18, 2011.
248  A. E. Weiss

221. I have worked at 2020 Delivery since 2007.

222. MCA, The definitive guide to UK Consulting Industry Statistics 2012 (London:
MCA, 2012), 22.
223. “The Business of Consulting,” Financial Times, November 11, 2014.
224. Ibid.
225. Ibid.
226. “Business of Consulting,” Financial Times, November 15, 2010.
227. Although the Coalition government did expand an alternative means of
skills transfer: increasing the number of former senior figures in the private
sector joining as Non-Executive Directors in state departments or agencies.
Elizabeth Rigby and Jim Pickard, “Labour questions impartiality of
Whitehall advisers,” Financial Times, April 8, 2015, accessed April 14, 2015,
http://www.ft.com/cms/s/0/c0d5ec68-db98-11e4-86a8-00144feab7de.
html#axzz3XGLv2eAP
228. NAO, Building capability in the Senior Civil Service to meet today’s challenges
(London: NAO, 2013), 16.
229. King and Crewe, The Blunders of Our Governments, 282.
230. HoC, Truth to Power, 128.
231. Gus O’Donnell, conversation with author in Bloomsbury, London, February
18, 2015. See Appendix 1 for biography; the view that certain skills are not
widely possessed by the civil service is supported by Martin Stanley, a former
civil servant from the 1970s to 2000s. Stanley opines: “Civil servants tend to
get promoted because they are good at working with Ministers as distinct
from delivery projects and services. This means that management consul-
tants should indeed add something to the mandarins’ skill set.” Martin
Stanley, conversation with author in Institute of Directors, Pall Mall,
September 17, 2015.
232. See Graeber, The Utopia of Rules for similar experiences in America.
233. Christopher Hood made a similar point to the PASC in 2013–2014, sug-
gesting that consultants now held much “corporate memory” of the civil
­service, rendering them almost indispensable. House of Commons, Truth to
Power, 85; King and Crewe, Blunders of Our Governments, describe this as
“asymmetries of knowledge,” 379–382. Both points are correct and rein-
force the “core competencies” thesis.
 6
Conclusions

A British citizen in the 2010s looking for the influence of management con-
sultancies on their lives would find much, but only after some consideration.
The impact would be subtle and indirect, though noticeable. Any post gently
dropping through a letterbox would, if delivered by Royal Mail (a once-public
body, privatised in 2014), have been undertaken via a route optimised follow-
ing the advisory services of McKinsey & Company.1 Should bins be due for
collection, they might well have been collected by council workers wearing
the uniforms of Serco—the outsourcing and advisory body.2 If the loud clang-
ing of bins had reminded our citizen of the need to pay their local authority
for garden waste collection for the year, it could involve making an online
payment via Capita.3 Whilst online, our resident would undoubtedly be able
to access a “balance scorecard” to view the “performance management” statis-
tics of the local council. Perhaps disregarding these, on arrival at work, it
would be hard for this individual to ignore her public sector employer’s
requests for a review of its “corporate strategy”—a concept brought to Britain
by the American generation of consultancies.4
In short, it is the mundane and administrative parts of the British state
which have been most heavily influenced by management consultancies. Yet,
as this final chapter concludes, the mundane can be of great importance. At
the start of this book, three questions were posed. First, why were manage-
ment consultants brought into the machinery of the state? Second, how has
state power been impacted by bringing profit-seeking actors into the machin-
ery of the state? And third, how has the nature of management consultancy
changed over time? This book has sought to address these questions by analys-
ing, from the 1960s to the 2010s, the distinct generations of consulting firms

© The Author(s) 2019 249

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3_6
250  A. E. Weiss

which gained prominence in advising and assisting the functions of the British
state, through reforming the civil service, reorganising the NHS, automating
benefits payments, and helping departments meet performance targets. This
history has demonstrated the openness of civil servants to working with non-­
state actors, the changing and also permanent characteristics of the British
state, and the important nuances needed to interrogate the nature of mono-
lithic terms such as the “state” or “consultancy,” or, even, “Britain.” In this
conclusion, the two concepts of the “governmental sphere” and “hybrid state”
are brought to full light, conclusions are drawn to where power truly lies in
the British state, and further avenues for research are proposed.

The Governmental Sphere and the Hybrid State

It is, however, true to say that the compact nature of the managerial layers of
English society – the fact that ‘everyone knows everyone else’ – means that sci-
entists and non-scientists do in fact know each other as people more easily than
in most countries. (C.P. Snow 1956)5

A notable characteristic of the postwar British state has been the polyphony
of voices discussing its reform. During the early 1960s, the concept of “plan-
ning” was proclaimed by state officials learning from Scandinavia or France,
developed by consultants seeking to apply industrial efficiency techniques in
the public sector, and politicians, employers, and trade unionists looking to
modernise Britain. The extensive use of McKinsey in the 1970s was facilitated
by the consultants’ deliberate ambition to infiltrate and influence the elite
networks of British society, tapping into Oxbridge or networks centred on
gentlemen’s clubs, where much of the “everyone knows everyone” culture
which C.P. Snow’s comment describes took place. The ease with which engi-
neering university graduates of Arthur Andersen fraternised with middle-­
ranking executive class civil servants in the 1980s during the Operational
Strategy speaks to a different network, one which the “new technical middle
class” in Britain, as David Edgerton describes, thrived in.6 And, more recently,
the seamless movement of individuals between private sector consultancies
and public sector organisations, and vice versa, frequently with briefs to mod-
ernise the state or the market or both, highlights the enmeshing of profes-
sional circles and networks.
Yet what joins these networks together? I propose that, gathering pace since
the postwar period, a “governmental sphere” has developed, predominantly in
Western, liberal-capitalist societies. In this “governmental sphere,” actors (both
  Conclusions  251

individuals and organisations) from a diverse array of backgrounds (the media,

politics, academia, business, consultancies) have participated in public and pri-
vate discourses concerned with how states and organisations should be governed.
By “governed,” I take this to broadly mean the “administration and manage-
ment of.” What binds this sphere together is a political agnosticism—which is
why consultancies have thrived across political administrations—and a convic-
tion that governing is a discipline which crosses the boundaries of private and
public enterprises.7 This led to a homogenisation of modes of government, hence
why targets and performance metrics in the early twenty-­first century are as at
home in a public school as they are in a hospital or oil refinery.
There is a critical point here for our understanding of consultancy and
state: as Fig. 6.1 suggests, consultants were just one of the multitude of influ-
ences contributing to the discourse regarding how to administer the state.
The model presented here borrows from Hugh Pemberton’s schema for
understanding the early 1960s “policy-making community,” which d ­ emonstrates
the “fragmented, interdependent and self-organising…policy networks” in his

Factors such as: political

ideology (e.g., nationalisation);
international legal constraints
(i.e., IMF, EU), etc.

Politico
-legal

Networks: Oxbridge, gentlemen’s clubs. business schools,

consulting alumni, World Economic Forum, UN

Politicians
Civil
Consultants
servants

Academics / Business
business schools leaders
Think-tanks

Media: liberal global publications, conferences, academic and trade

ic
om

books, articles, informal discussions

So tural
cu
on

cio
l
Ec

Factors such as: internal Factors such as: cultural

pressures (i.e., wage beliefs (i.e., meritocracy);
inflation); external pressures private sector developments
(i.e., oil price shocks), etc. (i.e., outsourcing), etc.

Fig. 6.1  The “governmental sphere” and forces of influence

252  A. E. Weiss

period of enquiry.8 This approach helps explain why in 1978, the Callaghan
government closed the Kirby Manufacturing Enterprise, despite the advice of
PA Management Consultants to the contrary, or why in the early 2000s,
Michael Barber, an academic, influenced the creation of the PMDU, which
then was further developed through the use of management consultancies. For
this reason, we can confidently disabuse some of the more pernicious accusa-
tions levelled at consultants: that they have too much power, influence, or treat
their clients as “marionettes on the strings of their fashions.”9 Consultants cer-
tainly have held an influential voice in discourses regarding the development of
the British state; but they have been by no means dominant—which is why the
claims of a “consultocracy” taking over in British society are overstated.
Consultants shaped and participated actively in the advent of the “governmen-
tal sphere,” but they have been mollified, supported, or undermined by the
other actors in this sphere.
This sphere reacts to external trends, developments, and processes. The
ideas within it clearly do not form within a vacuum. The turn of the state
towards the use of private enterprise in the early 1980s was a reaction to the
perceived national decline of British industry in the late 1970s. Earlier, in the
1960s, planning was embraced with fervour in a bid to maintain British global
standing. In the 1990s, the ideology of the Third Way and influence of
American governance approaches shaped the New Labour public sector
reform agenda. And in the 2010s, the Coalition government’s foreign policy
was influenced by David Cameron’s reading of a book by the journalist David
Gardner, of the liberal, internationalist, Financial Times.10
Noteworthy characteristics of the “governmental sphere” are its various
forms, wide membership, and expansive geographic span. Alcon Copisarow’s
networking in the Athenaeum Club, which helped gain McKinsey a major
assignment to restructure the government of Hong Kong, suggests a closed,
parochial, and physical sphere. So, too, does the fact that John Banham’s suc-
cessor at the Audit Commission was unearthed aboard an airplane travelling
back to London from the Ashes cricket tournament. Yet the transatlantic
influence of the bestselling book In Search of Excellence on Western modes of
governing states belies a more dynamic, open, and multi-media form.
Publications such as The Economist, Financial Times, or even the lesser-read
Management in Government (each British, though the first two with a broad,
international audience) frequently compelled readers to embrace modern
management methods. Similarly, the success of consultants in gaining trust in
elite cadres and the new technical middle class of British society demonstrates
the diminishment of the role of class in the British state, whilst s­ imultaneously
highlighting lingering facets. Does, for instance, Arthur Andersen’s hosting of
  Conclusions  253

a disco party for civil servants to celebrate the end of the Operational Strategy
demonstrate the ultimate in civil service-consultancy collaboration, or just
another power dynamic, where one privileged group (consultants) hosts for a
less privileged one (civil servants)? The answer, undoubtedly, varies by con-
texts, but alludes to the complexities of the “governmental sphere.”
It is the same actors in the “governmental sphere” who have been critical to
the rise of the “hybrid state” in the latter stages of twentieth-century Britain.
In this hybrid model, the boundaries between public and private agents were
blurred to the extent that both were intimately intertwined in the workings of
the state. Despite claims in the popular media, through the vantage point of
twenty-first century Britain this is by no means an historical aberrance. Our
history of consultancy and state can be broadly demarcated into three phases.
In the first phase, from the Edwardian era to end of the Second World War,
we have a “private sector-led state” period, with a high degree of non-public
provision of state functions. Public sector expenditure as a proportion of gross
domestic product (GDP) was low, at around 20 per cent.11 Despite the emer-
gence of the Liberals’ welfare reforms, voluntary, philanthropic and private
sector providers dominated the provision of welfare services. In terms of the
warfare state in the Second World War, large bodies such as the National
Filing Factories were run by private sector bodies, but contracted by the
state.12 In this era, at the risk of anachronism, we can conclude that the major-
ity of services that contemporaries would deem to be “public services” were
provided by private agents, charities, and philanthropists. Consultants were
used by the state, but only on an ad hoc basis, and usually to stimulate the
workings of the private sector; particularly with regard to industrial
efficiency.
In the second phase, from the Second World War to the early 1980s, the
state became larger (reaching around 50 per cent of GDP) and welfare ser-
vices, which emerged in tandem with a declining warfare state, were over-
whelmingly delivered by public sector agents. This era can be broadly defined
as the “public sector-led state.” In this period, bodies such as British Railways,
the National Gas & Coal Board, and the National Health Service were sym-
bolic of the confidence the public, state officials, and politicians placed in the
public sector. Management consultants emerged and thrived in this era; they
were hired by state bodies seeking to learn from other nations or industries as
to how to be more effective. Significantly, though, faith was still placed in the
ability of the state to combat decline—the spate of consultancy assignments
in the late 1970s aimed at revitalising the nationalised industries bears testa-
ment to this.
254  A. E. Weiss

Our final phase, from the 1980s onwards, marked a dramatic change and
heralded the emergence of the “hybrid state.” Here, a swathe of privatisa-
tions—which numerous consultants advised on—and the advent of large-­
scale outsourcing, particularly through the use of firms such as Capita,
fundamentally changed the delivery model of the “public sector-led state.”
Whilst the size of the state as a proportion of GDP remained roughly similar
(though it dropped around five percentage points) to our previous phase, the
important difference was that much of this spending went to private provid-
ers: an estimated £187 billion in 2013.13 In this hybrid state, whilst the wel-
fare developments of the “public sector-led state” remained, the profile of
those delivering the services changed: administrative staff, IT services, hospi-
tal porters, waste collection, social care staff, even government policy could
now be delivered by non-public sector actors. The services of management
consultancy firms increased significantly in this period, as they helped reform,
align, and reorganise state bodies for this new age. Of course, other actors
were also engaged in advising or supporting changes in this period—players
in the aforementioned—“governmental sphere.” The “hybrid state” was the
product of many hands.
Whilst attention in this book has focused overwhelmingly on public-­
private considerations with regard to the state, one can trace a similar conver-
gence of worlds in the non-state sphere. The financial crisis of 2008 led to
public funds being used to prevent private banking institutions from becom-
ing illiquid. The state became the Royal Bank of Scotland’s (RBS) largest
shareholder group (with over 80 per cent ownership in 2013).14 This resulted
in considerable blurring of definitions between the public and private. The
Royal Bank of Scotland Group public limited company (the name “public
limited company” itself begs questions as to the nature of the public/private
dichotomy) maintained the governance arrangements of a private firm, yet
had it become part of the state? Highlighting the homogenising influence of
the “governmental sphere” in 2011 RBS even hired McKinsey to advise on a
cost-efficiency restructuring.15 In the “hybrid state,” what was public seemed
increasingly private, and what was private became public.

Power, Consultants, Politicians, and Sir Humphrey

How did the powers of the state change in this period, and what role did con-
sultants play in particular? In the Introduction, I introduced an analytical
model for analysing the powers of the state (re-listed below).
  Conclusions  255

1. Coercive power
2. Fiscal power
3. Legal and normative power
4. Functional and service power
5. Administrative power

The purpose of this analytical model was to bring rigour to debates which
have variously suggested consultants—and private sector agents more
broadly—have “hollowed out” the state, or caused its “death.” Yet, a detailed
look at these powers leads to a different conclusion. The use of management
consultants has in no notable way impacted the state’s ability to declare wars
or coerce individuals into action. Consultancies, to a mild extent, may have
increased the fiscal powers of the state: Arthur Andersen’s work on the
Operational Strategy was, in part, aimed at reducing error, thereby lowering
the administrative costs of the state. But this is a largely indirect impact.
Consultants have had nil impact on the state’s law-making powers.
Where consultancies clearly have impacted the state is in our final two
delineations. McKinsey’s work on the reorganisation of the NHS included
analyses of service provision models to citizens, for instance. Although, as we
have seen, ultimately consultants did not possess decision-making powers. In
terms of administrative power, consultants have undoubtedly changed the
operations of the state. Whether this be through introducing planning in
government departments, changing the structure of the British Railways
Board, or generating intelligence to the Prime Minister through the Delivery
Unit, the administrative functions of the state have been fundamentally
shaped and reshaped by consultancy. Administrative power changes the way
citizens engage with the state; certainly, this is significant in its own right.
Nevertheless, to paraphrase Quentin Skinner, Accenture, Capita, or Deloitte
are not going to deprive any citizen of their liberty, wage a war, or raise taxes;
these are powers which still only state officials and politicians hold.16 This is
important because it means the more nefarious accusations levelled at consul-
tants must therefore be reasonably discounted. But consultants nevertheless
materially changed how the functions of the state were undertaken, if not
necessarily what these functions were.
The emergence of outsourcing firms is more complex, though. Whilst this
book has focused attention on management consultancy firms, outsourcing
has been included both because firms such as Capita have their origins in
consulting, and to highlight the differences between the two. Referring back
to our “powers” of the state, Capita’s running of the CRB during the early
256  A. E. Weiss

2000s emphatically did grant the ability to a private provider to determine

whether an individual was a criminal or was under investigation for being
one. The important caveat is that Capita were still ultimately accountable to
state officials for how they ran the CRB, but this was still a significant new
development in the operations of the state. The role of private providers here
is a further demonstration of the “hybrid state” in action.
However, the use of consultants by state bodies became so commonplace
that a clear attenuation of the state competencies was discernible. As the for-
mer Cabinet Secretary Gus O’Donnell commented in 2014 regarding the
skills deficit in the civil service, skills most frequently found in private sector
organisations—negotiating, commissioning, contracting—became highly
sought after in the British state in the early twenty-first century.17 As a conse-
quence, consultants were commonly used to bridge the gap between supply
and demand; there was simply insufficient in-house capability in the state to
match the demand for these skills, especially as the “hybrid state” adopted an
increasingly private sector methodology. The rationale given for the contract-
ing of Capita’s services for the running of Transport for London’s congestion
charge from 2003 being a case in point.
To borrow Michael Porter’s term, the loss of these “core competencies” can
best be explained by a simple but powerful force in British political history:
“path dependency.” The use of consultants quite simply begat the greater use
of consultants, to the extent that internal capability became sufficiently
diminished so that it was no longer economically viable, or practically possi-
ble, to rebuild the competencies. The use of the accountancy and data pro-
cessing generation of consultancies to plug the state’s decline in state
computerisation competencies demonstrates this vividly. So too does the
repeated use of consultants for similar tasks by the same organisation: the Post
Office or BBC’s use of McKinsey for strategic reviews from the 1960s to
2000s, for instance. Once consultants had gained a foothold in the state via
the CSD, it became easier for state bodies to use them. And once they had
been used, they would generally generate trust and confidence in their ser-
vices, which would further the likelihood of their future use. This insight
would come as little surprise to consultants themselves, who are aware that
the majority of fee income is from repeat clients.
This book has hopefully demonstrated the need for a far more nuanced
appreciation of the meaning of “management consultancy” than academia has
hitherto provided. Table 6.1 demonstrates the distinct backgrounds, types of
work, fees, and impact of consultancies in this period. It is clearly naïve to
speak of a homogenous entity of “consulting”; all future studies need to be
precise about the nature, intention, and types of actors at play. Similarly, this
Table 6.1  Selection of state consulting assignments of all generations, 2010sa
Date
awarded Consultancy Organisation Description Fee (excl VAT) Duration Generation
2010 Capgemini Croydon Council IT strategic advice and infrastructure £8,30,00,000 36 months Data
services, continued from contract begun processing
in 2003
2010 Serco Enfield Council Outsourcing IT provision and £2,40,00,000 60 months Outsourcing
management support, continued since
1999
2011 PA Consulting Department of Facilitation of three workshops £50,400 4 months British
Group Business,
Innovation &
Skills
2012 Capita Unknown Recruitment of two programme planners £1,00,000 6 months Outsourcing
for central government work
2013 McKinsey Ministry of Extension to Equipment Support £38,60,000 6 months American
Defence Programme
2013 McKinsey, PA Department of Support to Unsustainable Provider £20,00,000 n/a American
Consulting, Health Regime
Deloitte
2013 Accenture Department for Ongoing support for DWP in Universal £84,36,000 54 months Accountancy
Work & Contract
Pensions (DWP)
2013 Capgemini Fife Council Transformation partnership for business £2,60,00,000 48 months Data
and management consultancy service processing
 Conclusions 

(continued)
257
Table 6.1 (continued)
258 

Date
awarded Consultancy Organisation Description Fee (excl VAT) Duration Generation
2013 PwC HM Treasury To support the mitigation of HMT £80,00,000 n/a Accountancy
(HMT) reporting risk and support the Asset
Protection Scheme’s financial stability
objectives, including protecting RBS
A. E. Weiss

against exceptional credit losses on a

specific portfolio of assets, by
performing procedures to determine
the accuracy of the data reported by
RBS
2014 KPMG HM Treasury Project management support that will £7,50,000 5 months Accountancy
deliver the plan that enables the
Pensions Advisory Service to provide the
Pensions Guidance Guarantee Service
for HM Treasury from April 2015
2015 Deloitte Driver & Vehicle To support DVLA with the exit from their £350,000– 12 months Accountancy
Licensing current IT outsourced contract (PACT), £3,000,000
Agency (DVLA) developing and implementing a new
target operating model, focused on
digital capability and transitioning the
IT services to DVLA and where
appropriate to select suppliers
2015 Capita Sheffield City Outsourcing of administrative functions £17,00,00,000 120 months Outsourcing
Council
a
Author analysis from Hansard, data.gov.uk, and consulting reports
  Conclusions  259

book should have provided a far more detailed but also complete view of the
“state” than typical histories. By the 2010s, pictures of consultancies serving
the state were even more mixed, as Table 6.1 shows.
It is, I argue, not only possible, but vital, to attempt to delineate different
elements of the state. Without doing so, we merely revert to broad and
unhelpful generalisations about the “civil service” or “politicians.” As Fig. 6.2
shows, one can chart different elements of the state, but also how different
consultancies were used by these elements.
The state is much greater than Westminster and Whitehall. Indeed, the
roles of civil servants highlight the fact. In 2014, of 440,000 civil servants,
only 19,000 (4 per cent) worked on “policy”—the purview of Whitehall cen-
tral departments. By comparison, the majority of civil servants were engaged
in “operational delivery”—251,000 (57 per cent). And 83 per cent of civil
servants worked outside London.18 Clearly, London-centric histories are mis-
leading. But by the same token, it is dangerously facile to speak unthinkingly
of a “British state.” Major state reforms have seldom covered all of the British
Isles, and significant differences exist between the operations of major state
institutions, such as the NHS, across the jurisdictions. That there is clearly a

Key
1) British ‘Big Four’ External institutions
2) Americans • International Monetary Fund, United Nations, European Union, World
3) Accountants Trade Organisation
4) Data processors
5) Outsourcers
Flow of policy
Flow of ideas CENTRAL EXECUTIVE
• Bodies: Westminster, Whitehall
• Focus: administering the state sector
2 Westminster 1
3 Whitehall 2

1 2 3 4 5 1 2 3 4 5

LOCAL EXECUTIVE WIDER NON-EXECUTIVE

• Bodies: Local authorities
• Focus: administering local priorities
Governmental and delivering services
sphere
• Bodies: National Health Service,
Nationalised industries, Arms-
length bodies, etc.
• Focus: delivering priorities set by
central executive

Fig. 6.2  Bodies of the state and how consultants have changed its powers
260  A. E. Weiss

connection of power between Westminster and Whitehall throughout the

British Isles demonstrates there is still value in the term “British state,” but the
various complexities in these connections call for careful analysis.
A major consideration of this book has been where power lies in the British
state. We have seen major state reform take place away from Whitehall; much
of the Operational Strategy was developed and implemented in the provinces,
for instance. And this tempers somewhat the claims by many, such as Patrick
Joyce, that Britain is the most “centralised state” in the world.19 This presumes
a mono-causal, linear connection between policy-making in the executive
centre and service delivery in the agencies, state bodies, or local authorities. As
Fig. 6.3 shows, the state sector as an entity is far greater than the commonly
assumed Westminster and Whitehall cadre; with the armed forces, NHS, and
public sector construction elements clearly different in nature.
Indeed, much of the use of consultants by central government depart-
ments, such as the Prime Minister’s Delivery Unit, was intended to strengthen
the power of the centre, precisely because civil servants and politicians felt
otherwise they were pulling at “rubber levers.”20 Westminster and Whitehall
undoubtedly exert a strong power over the British state, but the history of its
relationship with consultancy demonstrates that in order to gain a truer and

Public sector employment by industry, 1991-2014 (000s)

7000

6000 Construction
HM Forces
Police
5000 Other health

4000 Other public

3000 Public admin

2000
Education
1000
NHS
0

NHS Education Public administration Other public sector

Other health & social Police HM Forces Construction

Fig. 6.3  The composition of the British state. (Based on author analysis from Office for
National Statistics, “Public Sector Employment.” Accessed August 18, 2015, http://
www.ons.gov.uk/ons/rel/pse/public-sector-employment/q1-2015/tsd-pse-series.html)
  Conclusions  261

deeper understanding of its nature, we need to look beyond a small part of

London to understand how the state functions.
The history has also helped to show the nuanced, complex, and varied roles
of the British state. Consultants worked on both its policy-making aspects
(such as advising the Department of Industry on the motorcycle industry’s
future prospects) and on its multifarious service delivery aspects; either in the
Royal Ordnance Factors, the operations of the Department for Health and
Social Services, or in delivering local authority services. The state which
emerges is thus one with huge resources focused on operational delivery, one
open to outside expertise and management advice, and one where the non-­
administrative classes are at the centre of its operations, not its periphery.
Reflecting back on earlier considerations in the Introduction, it is apparent
that this history firmly endorses the “revisionist” historians’ view of the British
state, and hopefully adds more knowledge and understanding of the nature of
the state in a temporal sense in terms of the post-Thatcher period, and in a
functional sense, in terms of governance of the state.
A striking revelation has been the relatively minor role politicians have
played in major state reform. Supposedly dramatic changes in state operations
invariably have passed through multiple political administrations. The use of
consultants elucidates this. Though Wilson is famed for his Labour govern-
ments adopting a new and more dirigiste approach to state planning, it was in
fact the Conservative Chancellor Selwyn Lloyd—supported by the premier,
Harold Macmillan—who introduced the practice of planning in government
circles in 1961. The concept behind the 1974 NHS reorganisation originated
in Labour circles, but was developed under the watch of Keith Joseph and
finally implemented by Labour. Similarly, though the Prime Minister’s
Delivery Unit was abolished by the Conservative-Liberal Coalition govern-
ment in 2010, it was re-established—rebranded as the “Prime Minister’s
Implementation Unit”—in 2012. The major continuity across all of these
changes is the influence of the “governmental sphere” in general, and the civil
service in particular. In the opinion of Gus O’Donnell, overlooking the
impact of “the governmental sphere” has led to “severely misleading” histories
of British politics and public sector reform, which overstate the role of politi-
cians.21 Political interest in state reform throughout this period has been at
best limited. It is the civil service who have driven state reform in most
instances, frequently facilitated and aided by consultants.
As we have seen though, we must be careful in providing nuance to our
concept of civil servants. Whilst the influence of the historically described
elite administrative class of civil servants and their relationship with the
American generation of consultancy cohere with accounts of the elite civil
 262  A. E. Weiss

service, we must also acknowledge the important role of executive, clerical,

and professional classes of civil servants. Mid-ranking civil servants, for
instance, worked with consultants in Arthur Andersen to implement the
Operational Strategy. This cohort of civil servants was seldom Whitehall-­
based, most likely non-Oxbridge-educated, and usually trained in the sci-
ences. Power in the state, therefore, lay not with the elected politicians, but
with the permanent bureaucracy and its various networks. As Lis Astall,
Managing Director of Accenture UK from 2003 to 2006 during the height of
the firm’s work for the British state, opined: “politicians provide a catalyst for
change, but they need to be aligned with the civil service – it’s the civil ser-
vants who broadly make things happen.”22 This is why management consul-
tants largely sought relationships with civil servants, rather than with
politicians.
A question is posed here: has the state used consultants too much? No con-
clusive answer is given, but an important data-point is provided. Profligacy of
public sector expenditure on consultants has been well documented.23 So,
too, has been the commentary in the “governmental sphere” as to the state’s
need to embrace private sector methods. This may lead one to assume that the
public sector has been an active user of consultancies over the postwar period,
as it sought to bridge the public-private gap. Yet, as Fig. 6.4 demonstrates, the

MCA revenues from public and private sectors as a proportion of sector

total, 1964-2013 (current prices)

1.20%
Private sector
Public sector
Percentage of public/private sector GDP

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%

Fig. 6.4  State and non-state use of consultants. (MCA data from MCA archives and annual
reports. “GDP data” from Office for Budget Responsibility, accessed August 9, 2015, bud-
getresponsibility.org.uk/pubs/PSF_aggregates_databank_Summer-Budget-20151.xls)
  Conclusions  263

state has used consultants to a far lesser extent than the private sector has.
This, at the very least, is a useful benchmark with which to consider criticisms
of the state’s overuse of consultants.

 he Future of the History of Consultancy

T
and the State
The various tables citing work undertaken by management consultancy firms
for the British state in Appendix 2 are but a glimpse of the full scale of this
neglected relationship. Yet better understanding the consultancy-state
dynamic has ramifications for our understanding of the British state, consul-
tancy, the civil service, global discourses around governing and governments,
British decline, and much beside. It is, sadly, impossible to do full justice to
all of these which in their own right are major research questions.
With such potential for further work still remaining, I wish, therefore, to
venture three proposed avenues for future researchers on this topic. First,
international comparative analysis between state-consulting relationships
would be beneficial. Determining what is peculiar to Britain—as well as what
is not—would significantly enrich our understanding of postwar develop-
ments. Denis Saint-Martin has begun this by analysing France and Canada; I
would suggest America (where Christopher McKenna has claimed consul-
tants helped develop the “contractor state”) and Germany (second only to the
United Kingdom in European consulting revenues) would provide excellent
further comparators.24 For instance, the experience of McKinsey & Company
in the United States was markedly different from the firm’s experience in
Britain. McKinsey found itself under intense media scrutiny for the firm’s
work for the New York Mayor John Lindsay from 1968 to 1974 which cov-
ered municipal hospitals, city traffic, rent controls, taxation of nicotine in
cigarettes, and community education.25 Since 1968 Carter Bales, a McKinsey
consultant, had gained an unpaid role as head of the Division of Program
Budget Systems in the New York City government. Over the same period,
Bales agreed—on behalf of the New York City government and McKinsey—a
number of assignments covering the city’s municipal hospitals and Model
Cities programme.26 Opponents of the New York City Mayor John Lindsay,
on learning of Bales’ dual roles, accused him of “intellectual patronage” of the
consulting firm on the front pages of the New York Times in 1970.27 Under
this media spotlight, despite being cleared of wrongdoing by the New York
City Board of Ethics and Association of Consulting Management Engineers,
264  A. E. Weiss

McKinsey felt deeply uncomfortable. Marvin Bower described the event as

“excruciatingly painful” and subsequently allowed 40 consultants to leave its
New York City office.28 Thereafter, the company sought to prioritise private,
rather than public, sector work in the United States.29
Whilst McKinsey did return for studies for New York City—including a
$2 million study in 2016 for Mayor Bill de Blasio on the potential role of
technology-enabled transport companies such as Uber in the city—the
strength of the relationship between McKinsey and the state here was signifi-
cantly weaker than in Britain.30 (That said, the 2012 Republican presidential
candidate Mitt Romney, a former consultant at Bain & Company, told the
editorial board of the Wall Street Journal that in order to reduce the size of the
state he would “have…at least some structure that McKinsey would guide me
to put in place… I’m not kidding. I probably would bring in McKinsey.”)31
In addition, in this future research across other national geographies, due
consideration of Pocock’s “three kingdoms” would undoubtedly help to
nuance and develop our understanding of the boundaries of nation states.
Second, as I have suggested, consulting should not be viewed in isolation
from the wider “governmental sphere.” Analyses of the roles of the media (in
particular publications such as The Economist and Financial Times); conferences
(e.g. the World Economic Forum); think-tanks (Institute for Public Policy and
Research, Central for Policy Studies, and others); and elite networks (the gen-
tlemen’s clubs of Pall Mall) on developments in the British state would all shed
greater light on the relative impact of consultancy versus other actors in the
“governmental sphere.” Work has begun on this individually, and tying these
together would be invaluable as part of a broader comparative framework.32
And finally, the role of gender has been conspicuously absent from this book,
and undoubtedly it is the poorer for it. It is notable that in the 1950s PA
Management Consultants sought to hire men, just as in the 1960s McKinsey
looked for Oxbridge rowers (who would have been overwhelmingly male, given
that the Oxford-Cambridge Women’s Boat Race became an annual event only
in 1964), or that even in the 2010s, consultancy remains a predominantly male
industry; not unlike politics, although increasingly less like the civil service.33
Important work, for instance, has recently emerged showing how the sidelining
of the female workforce in the UK computing industry—a major source of
consultancy usage, as we have seen—contributed to the industry’s failure to
achieve its full potential.34 Thus, the implications for the character, nature, and
even decisions made in the British state could be tantalising to uncover.
More broadly, though, the state’s use of external expertise in general and
management consultants in particular has been conspicuously absent from
most analyses of modern British history. This book has shown that only by
  Conclusions  265

understanding how and why management consultants emerged as a provider

of advice to the state from the era of economic collectivism in the 1960s
through to the era of economic liberalism in the 1980s that we can begin to
uncover the true nature of the British state. Different generations of consul-
tancies were brought into the state for different reasons, from averting fear of
national decline to seeking to emulate American models of governance to
increasing competition in the delivery of public services. These consultancies
were but one agent amongst many which helped to shape developments in
this period. They gained trust through inhabiting the same social networks as
their clients, and subtly, as the state came to rely increasingly on their services,
its own internal capabilities diminished to the extent that turning to consul-
tants became inevitable. Postwar state formation in Britain cannot be under-
stood without due consideration to the significant role management
consultants have played in its development.

Notes
1. Andrew Hill, “Royal Mail: The Inside Story”, Financial Times, October 17,
2014, accessed August 18, 2015, http://www.ft.com/cms/s/2/7b54bc84-
54c3-11e4-bac2-00144feab7de.html; “Leading in the 21st century: An inter-
view with Moya Greene,” McKinsey & Company, accessed August 18, 2015,
http://www.mckinsey.com/insights/leading_in_the_21st_century/an_inter-
view_with_moya_greene
2. See, for instance, “Serco – Bins and Recycling”, Canterbury City Council,
accessed August 18, 2015, https://www.canterbury.gov.uk/contact/environ-
ment/bins-and-recycling-team/
3. See, for instance, “Garden Waste Collection,” London Borough of Sutton,
accessed August 18, 2015, https://www.sutton.gov.uk/info/200449/waste_
and_recycling/1228/garden_waste_collection
4. See Chap. 3.
5. C.P. Snow, “The Two Cultures,” (paper for The Rede Lecture, 1959), accessed
August 19, 2015, http://s-f-walker.org.uk/pubsebooks/2cultures/Rede-
lecture-2-cultures.pdf
6. Edgerton, Warfare State, 172–73.
7. Though out of the scope of this research, I feel there may be a hypothesis
worth testing regarding the extent to which the emergence of the “govern-
mental sphere” in the postwar British state can help to explain the country’s
ultimate rejection of corporatism. For more on corporatism, see Alan Booth,
“Corporatism, capitalism and depression in twentieth-century Britain,” The
British Journal of Sociology 33, no.2 (1982): 200–223.
8. Pemberton, Policy Learning and British Governance, 11.
266  A. E. Weiss

9. Cited in Kipping and Engwall, Management Consulting, 14.

10. Cited in Anthony Seldon and Peter Snowdon, Cameron at 10: The Inside Story
(London: HarperCollins, 2015), 101. The book was Last Chance: The Middle
East in the Balance (London: I.B. Tauris, 2011), and opined that Arab countries
had to escape the rule of “autocracy” or their lives would face “bleak despair.”
11. For figures see Roger Middleton, Government Versus the Market: The Growth
of the Public Sector, Economic Management and British Economic Performance,
c. 1890–1979 (Cheltenham: Edward Elgar, 1996), 100.
12. Edgerton, Warfare State, 184.
13. NAO, The Role of Major Contractors in the Delivery of Public Services (London:
The Stationery Office, 2013), 10.
14. Tom Clark and Jill Treanor, “Royal Bank of Scotland should stay in public
ownership for now – poll,” The Guardian, April 16, 2013, accessed August
18, 2015, http://www.theguardian.com/business/2013/apr/16/royal-bank-
scotland-stay-public-poll
15. Emily Gosden and Harry Wilson, “RBS overhaul to see mass job losses,” The
Daily Telegraph, December 18, 2011, accessed August 18, 2015, http://www.
telegraph.co.uk/finance/newsbysector/banksandfinance/8964715/RBS-
overhaul-to-see-mass-job-losses.html
16. From Quentin Skinner, “What is the state?” (Lee Seng Tee Distinguished
Lecture, Wolfson College, University of Cambridge, 24 October 2007).
17. Gus O’Donnell, conversation with author in Bloomsbury, London, February
18, 2015.
18. Based on author analysis of Office for National Statistics, “Civil service
employment statistics, 2014.” Accessed August 18, 2015, http://www.ons.
gov.uk/ons/rel/pse/civil-service-statistics/2014/index.html
19. Joyce, The State of Freedom 1800, 335.
20. Cited in Richard Bacon and Christopher Hope, Conundrum: Why Every
Government Gets Things Wrong  – And What We Can Do About It (London:
Biteback, 2013), e-book, loc Chapter 17.
21. Gus O’Donnell, correspondence with author, August 31, 2015.
22. Lis Astall, interview with author, Institute of Directors, Pall Mall, March 9,
2016.
23. For examples, see footnote 118.
24. Saint-Martin, Building the New Managerialist State; McKenna, World’s Newest
Profession; “Consulting market of Germany grows to €25 billion,” Consultancy.
uk, March 3, 2015, accessed August 18, 2015, http://www.consultancy.uk/
news/1558/consulting-market-of-germany-grows-to-25-billion
25. New York Municipal Archives. Various: B83.96/ima; H85.95/mihim;
M83.96/gtia; B83.96/mihcm; M21 hchme/; M72.96/cbmca; M72.96/mtdb;
M72.96/cbmc; M19/apgh; B83.96/rcwas; M72.96/cbmc; B83.11/pbi;
Ed8.95/aef; En8.95/iecpt; E8.95/icp; En8.95/imir; En8.95/ipb; F49.95/do;
F49.95/gu; H36.11/caf; H36.11/cpabr; H36.95/aad; H36.95/pas; H36.95/
  Conclusions  267

pib; H36.95/su; H36.95/su; H84.95/rfpd; H84.96/soord; H36.11/ppb;

B83.95/ciup; B83.96/iLtr; B83.96/scmn; B83.96/ctts; M72.96/cbcdc;
M72.96/sbcdc; H35.96/hsac; B83.96/uprdp; M72.96/nymca; M72.96/
nymcao; H84.96/rcp; H35.96/rhsar; Ed8.96/scdm; H84.95/howr; H84.96/
arh; B83.96/tdpp; B83.96/tanm; B83.96/rsep; B83.96/tL; B83.96/iditc;
B83.96/ttnc; B83.96/tsep; H84.96/nrcp; B83.96/tauap; C56.95/ipips;
B83.96/rcpidt; B83.96/rcpid; B83.96/csidt; B83.96/rcpta; B83.96/trgen;
B83.96/incid; B83.96/proj; B83.96/sales; 86 B19 hafny.
26. Duff McDonald, The Firm, 70–73.
27. Covered in McKenna, World’s Newest Profession, 188.
28. McDonald, The Firm, 70–73.
29. New York Municipal Archives. Various: B83.96/ima; H85.95/mihim;
M83.96/gtia; B83.96/mihcm; M21 hchme/; M72.96/cbmca; M72.96/mtdb;
M72.96/cbmc; M19/apgh; B83.96/rcwas; M72.96/cbmc; B83.11/pbi;
Ed8.95/aef; En8.95/iecpt; E8.95/icp; En8.95/imir; En8.95/ipb; F49.95/do;
F49.95/gu; H36.11/caf; H36.11/cpabr; H36.95/aad; H36.95/pas; H36.95/
pib; H36.95/su; H36.95/su; H84.95/rfpd; H84.96/soord; H36.11/ppb;
B83.95/ciup; B83.96/iLtr; B83.96/scmn; B83.96/ctts; M72.96/cbcdc;
M72.96/sbcdc; H35.96/hsac; B83.96/uprdp; M72.96/nymca; M72.96/
nymcao; H84.96/rcp; H35.96/rhsar; Ed8.96/scdm; H84.95/howr; H84.96/
arh; B83.96/tdpp; B83.96/tanm; B83.96/rsep; B83.96/tL; B83.96/iditc;
B83.96/ttnc; B83.96/tsep; H84.96/nrcp; B83.96/tauap; C56.95/ipips;
B83.96/rcpidt; B83.96/rcpid; B83.96/csidt; B83.96/rcpta; B83.96/trgen;
B83.96/incid; B83.96/proj; B83.96/sales; 86 B19 hafny.
30. “City shares heavily redacted documented related to $2  m Uber study”,
Politico, April 3, 2016, accessed October 6, 2016: http://www.politico.com/
states/new-york/city-hall/story/2016/03/city-shares-heavily-redacted-docu-
ment-related-to-2m-uber-study-031963
31. Quoted in McDonald, The Firm, 1.
32. See for instance: Colin Seymour-Ure, Prime Ministers and the Media: Issues of
Power and Control (Oxford: Blackwell, 2003); Hartwig Pautz, “New Labour
in government: Think-tanks and social policy reform, 1997–2001,” British
Politics 6, no. 2 (2011): 187–209; Amy Milne-Smith, London Clubland: A
Cultural History of Gender and Class in Late Victorian Britain (New York,
N.Y.: Palgrave Macmillan, 2011); David Marsh and Matthew Hall, “The
British Political Tradition and the Material-Ideational Debate,” The British
Journal of Politics and International Relations (2015), accessed August 18,
2015, doi: https://doi.org/10.1111/1467-856X.12077
33. This has been explored for the consulting industry specifically, though not the
state, in: Marsh, The Feminine in Management Consulting: Power, Emotion and
Values in Consulting Interactions.
34. Marie Hicks, Programmed Inequality: How Britain Discarded Women
Technologists and Lost Its Edge in Computing (Cambridge, Mass.: MIT Press,
2017).
 Appendix 1: Key Characters by Chapter

Below are listed selected individuals, either interviewed as part of this research,
or who have featured significantly in the chapters above. Unless otherwise
cited, details composed from interviews, Who’s Who (various editions), news-
paper articles, and the social media networking site LinkedIn.

Featured in “Chapter 2: Planning”

Bedaux, Charles Eugène  Born in Charonton, near Paris, October 26, 1886,
died February 18, 1944. Naturalised as US citizen in 1917. Fifth richest man
in America by 1934 through his development of the Bedaux Efficiency
System, which through the 1920s and 1930s was installed by firms including
Du Pont, General Electric, Fiat, and Imperial Chemical Industries. Seeking
favour with the Third Reich in 1937, organised a tour of German factories for
the Duke and Duchess of Windsor for publicity. From 1940, worked on
improving the French coal-mining industry for the Nazis. Arrested by
Americans on December 5, 1942, in Sahara desert. Committed suicide in
Miami, Florida, whilst under arrest.1

© The Author(s) 2019 269

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3
270  Appendix 1: Key Characters by Chapter

Cox, Sir George Edwin  Born May 28, 1940. Education: Quintin School;
Queen Mary College, University of London (BScAeEng). Engineer at BAC
from 1962 to 1964. Systems Designer and later Manufacturing Manager at
Molins Machines from 1964 to 1969. Joined Urwick, Orr & Partners in
1969. Left to become UK Director at Diebold Group in 1973. Set up Butler
Cox (with David Butler) in 1977; served as Managing Director until 1992.
President of Management Consultancies Association in 1991. Chairman and
later Chief Executive of P-E International between 1992 and 1994. Later
Chief Executive and Chairman of Unisys Ltd.; Director General of Institute
of Directors; Senior Independent Director of LIFFE; Chair of the Design
Council and undertook the Cox Review (of Creativity in Business) for HM
Treasury in 2005. Board member of NYSE-Euronext since 2007.

Donaldson, Hamish  Born June 13, 1936. Educated at Oundle School and
Christ’s College, University of Cambridge (MA). 2nd Lieutenant in Seaforth
Highlanders from 1955 to 1957. Worked at De La Rue Bull Machines
Limited from 1960 to 1966. Joined Urwick, Orr & Partners in 1966, leaving
in 1973. Merchant banker at Hill Samuel & Co from 1973 to 1991. Published
A Guide to the Successful Management of Computer Projects (ABP) in 1978,
reissued as Mantrap: Avoiding the Pitfalls of Project Management (DRJ) in
2006. Chairman of London Bridge Finance from 1993 to 1995. Freeman of
the City of London since 1988. Chairman of Haslemere Festival since 2003.

Forrington, Vic  Gained MA in Mathematics and Diploma in Computing

from University of Cambridge. Worked at Royal Aircraft Establishment and
as a Research Fellow at University of Manchester where he was awarded his
PhD. Joined Urwick Group as a management consultant in 1964. Set up own
consultancy practice in 1979.

Garrett, John Laurence Born Romford, Essex, September 8, 1931. Died

Norwich, September 11, 2007. Educated at University College, Oxford, with
First in Geography. King George VI Fellow of University of California
Business School from 1956 to 1957. Director of public services, Inbucon,
from 1963 to 1974, and associate director from 1983 to 1987. Consultant to
Fulton Committee on the Civil Service from 1966 to 1968. MP (Labour) for
Norwich South from 1974 to 1983 and 1987 to 1997. Member (Labour) for
Norfolk County Council from 1997 to 2001.

Graham, Antony Richard Malise Born October 15, 1928. Educated at

Abberley Hall, Worcestershire and The Nautical College, Pangbourne. Master
Mariner at the Merchant Navy from 1945 to 1955. Joined Production
   Appendix 1: Key Characters by Chapter  271

Engineering Limited in 1960, becoming a Regional Director in 1970 and

leaving in 1972. From 1972 was a Regional Industrial Director (Under
Secretary) at the Department of Trade and Industry/Department of Industry.
Later a Director at the Department of Trade and Industry from 1983 to 1985,
and Director at Clive & Stokes International from 1985 to 1995.

Kaufman, Sir Gerald (Bernard)  Born June 21, 1930. Died February 26,
2017. Educated at Leeds Grammar School; Queen’s College, University of
Oxford. Political correspondent until 1965. Parliamentary Press Liaison
Officer for Labour Party from 1965 to 1970. Member of Parliament (Labour)
for Manchester, Ardwick from 1970 to 1983. Parliamentary Under Secretary
of State, Department of Energy from 1974 to 1975. Minister of State for
Department of Industry from 1975 to 1979, during the time of the Boston
Consulting Group’s report on the future of the motorcycle industry. Member
of Parliament for Manchester Gorton from 1983 until his death.

Lubbock, Eric Reginald, 4th Baron Avebury Born September 29, 1928.

Died February 14, 2016. Educated at Harrow School. Gained a BA in
Engineering from Balliol College, Oxford. Chartered Engineer. Guardsman,
2nd Lieutenant in the Welsh Guards from 1949 to 1951. Graduate Apprentice
at Rolls Royce Limited from 1951 to 1953. Management consultant at
Production Engineering Limited from 1953 to 1960. Elected as Liberal MP
for Orpington in 1962, serving until 1970. Liberal Whip in the House of
Commons from 1963 to 1970. Director of C.L. Projects Limited (computer
consultants) from 1966. Elected Member of the House of Lords in 1999.

Featured in “Chapter 3: Reorganising”

Carey, Sir Peter Willoughby  Born July 26, 1923. Died February 4, 2011.
Educated at Portsmouth Grammar School; Oriel College, University of
Oxford; School of Slavonic Studies. Foreign Office (German Section) from
1948 to 1951. Joined Board of Trade in 1953. Principal Private Secretary to
Presidents of the Board of Trade from 1960 to 1964. Assistant Secretary
(1963–1967) and Under Secretary (1967–1969) at the Board of Trade. Under
Secretary at Ministry of Technology (1969–1971); Deputy Secretary, Cabinet
Office (1971–1972); Deputy Secretary and later Second Permanent Secretary
at Department of Industry from 1972 to 1974. Second Permanent Secretary
(1974–1976) and then Permanent Secretary (1976–1983) at Department of
Industry. Later Senior Adviser to Morgan Grenfell Group, 1990–1996.
272  Appendix 1: Key Characters by Chapter

Copisarow, Sir Alcon (Charles)  Born June 25, 1920. Died August 2, 2017.
Educated at Manchester Grammar School; University of Manchester; Imperial
College of Science and Technology. Council of Europe Research Fellow from
1942 to 1947. Joined Home Civil Service in 1946. Office of Minister of
Defence (1947–1954); Scientific Counsellor, British Embassy, Paris
(1954–1960); Director, Forest Products Research Laboratory, Department of
Scientific and Industrial Research (1960–1962); Chief Technical Officer,
National Economic Development Council (1962–1964); Chief Scientific
Officer, Ministry of Technology (1964–1966). Joined McKinsey & Company
in 1966 as its first non-American Worldwide Director. Served a variety of
clients and industries, including National Westminster Bank, Bank of
England, and Government of Hong Kong. Left McKinsey & Company in
1976. Later non-executive Director at British Leyland, Special Adviser to
Ernst & Young, By-Fellow of Churchill College, University of Cambridge,
and Chairman of Trustees, Eden Project. Author of autobiography Unplanned
Journey (London: Jeremy Mills Publishing, 2014).

Doyle, Bernard (Frederick) Born July 17, 1940. Educated at St Bede’s

College; University of Manchester (BSc Hons); Harvard Business School
(MBA), 1965–1967. Chartered Engineer since 1965. Resident Civil Engineer
with British Rail from 1961 to 1965 before leaving to Harvard. Joined Arthur
D. Little in 1967, leaving in 1972. Later Director of Engineering Division at
Booker McConnell Ltd. (1973–1976); Managing Director of MSL Search
and Selection (1997–1999); Director of KPMG Search and Selection (recruit-
ment consultancy) practice (2001–2005); Partner at GatenbySanderson
(2005–2009).

Giachardi, David John Born May 17, 1948. Educated at Watford Boys’

Grammar School, Merton College, University of Oxford (BA Chemistry) and
St John’s College, University of Oxford (DPhil Chemistry). On completion of
DPhil left Oxford to become consultant at Boston Consulting Group in
1975, joining Courtaulds in 1979. At varying times Director of Research,
Executive Director, Director of Human Resources at Courtaulds until 1998.
Later Secretary General and Chief Executive at the Royal Society of Chemistry
from 2000 to 2006.

Hedley, Barry  Gained MA in Mechanical and Chemical Engineering from

University of Cambridge in 1968, MBA (Baker Scholar) from Harvard
Business School in 1970. Sponsored through Cambridge by ICI Limited,
Harkness Fellow at Harvard; joined Boston Consulting Group in 1970 as a
   Appendix 1: Key Characters by Chapter  273

Consultant, leaving as a Director in 1976 to join Courtaulds Group, where he

became a Director of International Paint plc. He left Courtaulds in 1979 to
become European founder of Braxton Associates, a strategy consultancy
which later became the global strategy consultancy practice of Deloitte. At
Boston Consulting Group inter alia led the 1975 study on The Future of the
British Motorcycle Industry for the Department of Industry. Senior Bursar
and Director of Management Studies at Gonville and Caius College,
University of Cambridge, 2000–2007. Fellow at Cambridge Judge Business
School since 2001 and Emeritus Fellow, Gonville & Caius since 2007.

Jacques, Elliot  Born in Toronto, Ontario, January 18, 1917. Died March 8,
2003. Educated at University of Toronto, studied medicine at Johns Hopkins
University, and received PhD in social relations from Harvard University.
Moved to England during war and remained thereafter. Founded Tavistock
Institute of Human Relations in 1946 and School of Social Sciences at Brunel
University in 1964, also becoming head of the latter’s Research Institute of
Organisational Studies. Prominent for developing organisational psychology
theories of the “mid-life crisis” and “time-span of discretion.” This second
concept proposed that roles within organisations have finite times during
which someone can fulfil the role unsupervised.

Meyjes, Sir Richard  Born Dunstable June 30, 1918, died March 9, 2013.
Educated at University College School Hampstead and began legal studies
before serving in the Royal Army Service Corps in the war. Qualified as a
solicitor in 1946, joining legal department of Anglo-Saxon Petroleum, a sub-
sidiary of the Shell Company. Later moved into commercial activities at Shell,
becoming marketing co-ordinator of Shell International Petroleum. In 1969
asked by Ted Heath to form a “Businessmen’s Team” to advise on ways of
making the civil service more efficient were the Conservatives to win the
General Election in 1970. Served from 1970 to 1972 in this role, leaving a
legacy of a number of further posts filled with business experience in the civil
service, as well as reviews of bureaucratic procedures. Returned to Shell as a
Director until retirement in 1976. Subsequently Chairman of Coates Brothers
and the Association of Optometrists, and Director of Portals Holdings.
Knighted in 1972. Appointed High Sheriff of Surrey in 1983.

Owen, Lord David Born Plympton, Devon, July 2, 1938. Educated at

Mount House School, Tavistock and Bradfield College, Berkshire. Studied
medicine at Sidney Sussex College, Cambridge and undertook clinical train-
ing at St Thomas’ Hospital from October 1959. Joined Labour Party in 1960
274  Appendix 1: Key Characters by Chapter

and elected to Parliament in 1966. Roles included: Parliamentary Under

Secretary of State for Navy and for Health, before promotion to Minister of
State for Health in July 1974. Foreign Secretary from 1977 to 1979. Founder
and leader of Social Democratic Party from 1983 to 1987, and continuing
SDP from 1988 to 1990. Since 1990 has sat in House of Lords as crossbench
peer.

Parker, Hugh  Born June 12, 1919, in Boston, Massachusetts. Died June 16,
2008. Educated at Tabor Academy in Marion Massachusetts; Trinity Hall,
University of Cambridge (1937–1939); and Cambridge, Massachusetts
Institute of Technology (1939–1941). Rowed successfully for Cambridge in
1937 Boat Race. Worked at North Carolina Shipbuilding Company from
1941 to 1943, General Electric from 1945 to 1946 and Ludlow Manufacturing
from 1947 to 1950. Joined McKinsey & Company in 1951, becoming
Partner-in-charge of London office in 1959. Senior Director from 1974 until
retirement in 1984.

Rogers, Sir Philip  Born August 19, 1914, died May 24, 1990. Educated at
William Hulme’s Grammar School, Manchester (1921–1932). Gained MA
from Emmanuel College, Cambridge, in 1936  in History and Economics.
Served in Colonial Office from 1936 to 1964, with a focus on personnel man-
agement. Deputy Secretary to the Cabinet from 1964 to 1967. Following the
Fulton Report, from 1968 to 1970 served in Civil Service Department as
deputy secretary and second permanent secretary, where he was responsible
for implementing the report’s recommendations. Between 1970 and his
­retirement in 1975 Permanent Secretary at the Department of Health and
Social Security which covered 91,000 staff. Delayed retirement in 1974 to
facilitate implementation of NHS reorganisation under new Labour adminis-
tration. Subsequently Chairman of the board of management at London
School of Hygiene and Tropical Medicine (1977–1982) and Outward Bound
Trust (1976–1980), Member of Court of London University (1978–1985)
and of council of Reading University (1978–1987). Appointed CMG in
1952, CB in 1965, KCB in 1970 and GCB in 1975.

Strage, Henry  Born 1933. Gained BS degree in Chemical Engineering from

Worcester Polytechnic Institute, Massachusetts in 1954. Also gained MBA
from Columbia University and PhD (honoris causa) from Worcester
Polytechnic Institute. Joined McKinsey & Company in 1962. Left as Senior
Director of London Office in 1991, having focused on public sector studies
covering national economic development, healthcare, education, transport,
   Appendix 1: Key Characters by Chapter  275

disaster relief, and local government and social welfare in the United Kingdom.
Also worked for Prime Minister’s Think Tank. On retirement in 1992 became
Professor of Strategic Studies at European Business School.

Williams, Francis David Kennard Born 1918. Died 1995. Educated at

Stonyhurst College and then Balliol College, Oxford. Military service from
1940 to 1943 with the Oxford & Bucks. Light Infantry. Served as
Administrative Officer, Nigeria from 1941, rising to the rank of Class I in
1959. Entered the UK Civil Service in 1961 as Principal in the Ministry of
Health. Seconded to Privy Council Office in 1968 as Principal Private
Secretary to the Lord President, then Assistant Secretary to the Department of
Health and Social Security. Awarded the CBE in 1976. Retired in 1978.
Subsequently founder-director of the Linacre Centre for the Study of the
Ethics of Health Care.

Featured in “Chapter 4: Automating”

Burgess, Keith, OBE  Born September 1, 1946. Educated at Lewis School for
Boys, Pengam, and University of Bristol (BSc 1967, PhD 1971). Joined
Arthur Andersen on completion of PhD in 1971. Managing Partner for UK
and Ireland of Andersen Consulting (consulting division of Arthur Andersen
which separated operationally from the accountancy division in 1989) from
1989 to 1994. Global Managing Partner for Practice Competency from 1994
to 1997 and Senior Partner in 2000. President of the Management
Consultancies Association from 1994 to 1995. Vice-Chairman of Public
Service Productivity Panel for HM Treasury from 2000 to 2006.

De Paula, (Frederic) Clive, CBE  Born November 17, 1916. Educated at

Rugby School. Gained ACA accounting qualification in 1940, Fellow of
Chartered Accountants in 1951, JDipMA (Joint Diploma in Management
Accounting) in 1966. Joined Robson, Morrow & Company management
consultants in 1946, becoming Partner in 1951. Seconded to Department of
Economic Affairs and then Ministry of Technology as an Industrial Adviser in
1967. Co-ordinator of Industrial Advisers to Government in 1969. Returned
as Senior Partner at Robson, Morrow & Company from 1970 to 1971. Later
Managing Director, Director, Deputy Chairman and Chairman at Agricultural
Mortgage Corporation Ltd. Chairman of Dennys, Sanders & Greene from
1987 to 2008.
276  Appendix 1: Key Characters by Chapter

Hickey, Stephen  Educated at Corpus Christi College, Oxford (BA, MA) in

History and St Antony’s College, Oxford (DPhil) in History. Joined
Department of Health and Social Security in 1974, rising to Assistant
Secretary in 1985. Seconded to Rank Xerox (UK) from 1989 to 1990. Chief
Executive of Civil Service College from 1994 to 1998. Non-executive director
of Wandsworth PCT (later CCG) since 2009.

Kaye, David  Educated in Mathematics, Cambridge, in Statistics at Oxford

and in Operational Research at Ann Arbor in Michigan, USA. Commenced
career in market research before moving on to planning models at Shell
International. Joined the London office of Arthur Andersen & Co. in 1962,
becoming partner by 1967. On joining in 1962, management and informa-
tion consulting headcount numbered 30. Responsibilities at Arthur Andersen
included Operational Research, and commercial and public sector consulting.
Author of GameChange: The impact of information technology on corporate
strategies and structures (London: Heinemann Professional Publishing, 1989).

Otway, Mark Educated at Churchill College, Cambridge from 1967 to

1970  in Natural Sciences and Chemical Engineering. Joined Andersen
Consulting in 1970, rising to Partner in 1982, before Managing Partner for
BPM (outsourcing) from 1990 to 2000. Engagement Partner on the
Department of Social Security’s “Operational Strategy” from 1982 to 1988.
Independent consultant since 2000, and Chairman of outsourcing and shared
services consultancy, Alsbridge plc.

Watmore, Ian  Born July 5, 1958. Educated at Whitgift School, Croydon and
Trinity College, Cambridge (BA), 1980. Worked for Andersen Consulting’s
“Operational Strategy” from 1987. UK Managing Director of Accenture (for-
merly Andersen Consulting) from 2000 to 2004. Government Chief
Information Officer from 2004 to 2005. Head of Prime Minister’s Delivery
Unit from 2005 to 2007. Chief Executive of Football Association from 2009
to 2010. Chief Operating Office of Efficiency and Reform Group in Cabinet
Office from 2010 to 2012.

Featured in “Chapter 5: Delivering”

Astall, Lis  Born June 28, 1960. Educated at Jersey Ladies’ College St Helier,
Université de Nice and London School of Economics. Joined Arthur Andersen
(later Andersen Consulting then Accenture) in 1984 as an information
­management consultant, becoming a partner in 1994, global head of strategy in
   Appendix 1: Key Characters by Chapter  277

government from 1999 to 2001 UK Managing Director from 2003 to 2006, and
Europe, Africa and Latin America Managing Director for government from 2006
to 2009. Subsequently President of British Show Jumping from 2009 to 2012.

Barber, Sir Michael  Born November 24, 1955. Educated at Bootham School,
York and Queen’s College, Oxford (BA) 1977. PGCE in 1979 and MA in
1991. History Teacher from 1979 to 1983. Education office, National Union
of Teachers from 1989 to 1993. Professor of Education, Keele University,
from 1993 to 1995. Director, Standards and Effectiveness Unit and Chief
Adviser to Secretary of State on School Standards, Department for Education
and Employment from 1997 to 2001. Chief Adviser to Prime Minister on
Delivery and Head of Prime Minister’s Delivery Unit from 2001 to 2005.
Head of Global Education Practice, McKinsey & Company from 2005 to
2011. Since 2011, Chief Education Advisor, Pearson.

Benton, Rich  Educated at Salesian College and University of Leeds (BA,

Geography) from 1975 to 1978. Finance trainee and accountant, London
Underground from 1978 to 1984. Founder Director and co-owner of Capita
from 1984 to 1998. Chairman of PRG from 2004 to 2007. Chairman of
Mouchel plc, a consultancy, 1998 to 2009.

Guinness, Sir John Ralph Sidney CB  Born December 23, 1935. Educated at
Rugby School; Trinity Hall, University of Cambridge (MA History). Joined
Foreign Office in 1962. Seconded to Central Policy Review Staff, Cabinet
Office from 1972 to 1975 and later from 1977 to 1979. Transferred to Home
Civil Service in 1980. Served in the Department of Energy as Under Secretary
(1980–1983), Deputy Secretary (1983–1991), and Permanent Secretary
(1991–1992). Chairman of British Nuclear Fuels from 1992 to 1999.
Chairman of Trinity Group Finance Ltd. from 1999 to 2003.

Birt, Baron  John Birt. Life peer since 2000. Knighted 1990. Born December
10, 1944. Educated at St Mary’s College, Liverpool, and St Catherine’s
College, Oxford (MA). Various roles in television and media: Controller of
Features and Current Affairs, LWT from 1977–1981. Director General, BBC
from 1992 to 2000. Adviser, McKinsey & Company, 2000 to 2005. Prime
Minister’s Strategy Adviser from 2001 to 2005.

Major, Rt. Hon. Sir John  KG 2005, CH 1999, PC 1987. Born March 29,
1943. Educated at Rutlish. Banker at Standard Chartered Bank from 1965 to
1979. Member, Lambeth Borough Council from 1968 to 1971. MP from
1979. Prime Minister and Leader of Conservative Party from 1990 to 1997.
278  Appendix 1: Key Characters by Chapter

O’Donnell, Sir Augustine Thomas  KCB 2005, CB 1994. Born October 1,

1952. Education: University of Warwick (BA), Nuffield College, Oxford
(MPhil). Various civil service posts as an economist. Head of Government
Economic Service, 1998 to 2003. Permanent Secretary from 2002 to 2005.
Cabinet Secretary and head of the Home Civil Service from 2005 to 2011.
Senior Advisor and Chairman of Frontier Economics, an economic consul-
tancy, since 2012.

Wilson of Dinton, Richard Thomas James Wilson  Life Peer since 2002.
GCB in 2001, KCB 1997, CB, 1991. Born October 11, 1942. Educated at
Radley College, Clare College, Cambridge. Called to Bar in 1965. Joined
Board of Trade as Assistant Principal in 1966, Private Secretary to Minister of
State, Board of Trade from 1969 to 1981. Various roles in Department of
Energy and Cabinet office until Permanent Secretary of Department of
Education from 1992 to 1994, Permanent Under Secretary of State, Home
Office, 1994 to 1997. Cabinet Secretary and Head of Home Civil Service
from 1998 to 2002. Since, Master, Emmanuel College, Cambridge and
Chairman, C. Hoare & Co. Bankers, since 2006.

Note
1. David Nasaw, “Remembering a Life That Read Like a Movie Script”, The
New York Times, November 3, 1996.
 Appendix 2: Detailed Selection
of Consultancy Assignments by Generation

The following tables provide a more comprehensive selection of management

consultancy assignments, split by generations of consultancies, under the
period of enquiry.

© The Author(s) 2019 279

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3
Table A.1  Detailed selection of state consultancy assignments by British generation firms, 1920s–1980sa
280 

Date
awarded Company Organisation Nature of assignment
1929 Harold Whitehead & Partners Ltd Post Office Advice on business organisation and sales training
1940 Urwick Orr & Partners National ordnance and Productivity increase
armament factories
1942 Lyndall Urwick Treasury Administrative and clerical improvements
1944 Lyndall Urwick War Office Advice to Petroleum Warfare Department
1947 Production Engineering Cotton Board Productivity increase in Musgrove Cotton Mills
1948 Production Engineering British European Airways Reorganisation
1956 Harold Whitehead & Partners Ltd Post Office Review of organisation and methods
1960 Urwick Orr & Partners British Transport Commission Training
1963 A.I.C. Limited and various Ministry of Aviation Studied engineering and maintenance organisation
(AIC); studied marketing organisation (Urwick);
studied the Financial Comptroller’s division (Peat)
1964 PA Management Consultants Ltd British Transport Commission Organisation review
1965 PA Management Consultants Ltd Home Office Reorganisation
1965 Urwick Orr & Partners Ministry of Defence Organisation advice
1965–1967 A.I.C. Limited Ministry of Aviation Investigation of industrial experience in development
and application of cost estimating to the Department
1965–1967 PA Management Consultants Ltd Ministry of Aviation Cost Estimating Study; preparation of Case Histories
on specified items
1965–1967 PA Management Consultants Ltd Ministry of Defence Efficiency at industrial establishments; feasibility of
budgetary systems and incentive schemes
1965–1967 A.I.C. Limited Ministry of Defence Review of Royal Engineers Resources Organisation
1965–1967 Urwick Orr & Partners Ministry of Defence To increase effectiveness of the work and
organisation of the Ship Department
Appendix 2: Detailed Selection of Consultancy Assignments...

1965–1967 A.I.C. Limited Ministry of Defence Introduction of Dockyard Incentive Bonus Schemes
1965–1967 P-E Consulting Group Ltd Ministry of Defence Review of resources distribution in Portsmouth
Dockyard
1965–1967 A.I.C. Limited Ministry of Defence Automatic planned maintenance system for yard
plant at Portsmouth using Electronic Data Processing
1965–1967 A.I.C. Limited Ministry of Defence Introduction of Dockyard Incentive Bonus Scheme
into the Naval Store Department, Portsmouth
1965–1967 P-E Consulting Group Ltd Home Office Review of Prison Laundries
1965–1967 A.I.C. Limited Home Office General Management Review of Prison Department
1965–1967 PA Management Consultants Ltd Home Office Review of structure and organisation of Metropolitan
Police
1965–1967 PA Management Consultants Ltd HMSO To increase productivity and reduce costs at HMSO
Press, Edinburgh
1965–1967 Urwick Orr & Partners HMSO Survey of operations and management in the light of
expected computer and other technological
developments
1965–1967 Urwick Orr & Partners Ministry of Technology Review of methodology of evaluating and controlling
research and development programmes and projects
1965–1967 P-E Consulting Group Ltd Ministry of Technology Work measurement and incentive bonus scheme for
National Engineering Laboratory
1965–1967 A.I.C. Limited Ministry of Technology Two assignments to investigate organisational and
accounting practices concerned overhead charges
and technical costs
1965 PA Management Consultants Ltd Denham Committee for British Examining feasibility of establishing export
National Export Council corporations for the west coast of America and
West Germany
1965 A.I.C. Limited Denham Committee for British Examining feasibility of establishing export
National Export Council corporations for the west coast of America and
West Germany
1965 PA Management Consultants Ltd County Borough of Grimsby A two-year study to improve administrative
procedures and methods of working
1966 PA Management Consultants Ltd Metropolitan Police Reorganisation
1967 PA Management Consultants Ltd HM Treasury Management structure review
  Appendix 2: Detailed Selection of Consultancy Assignments... 

1967 PA Management Consultants Ltd Department for Employment Survey of employers’ recruitment practices
and Productivity
1969 PA Management Consultants Ltd Conservative Party Advisory
281

(continued)
Table A.1 (continued)
282 

Date
awarded Company Organisation Nature of assignment
1969–1970 Urwick Orr & Partners Ministry of Agriculture, A study on checking and control within a concept of
Fisheries and Food public accountability
1969–1970 Urwick Orr & Partners Ministry of Agriculture, Management by Objectives (MbO)—Feasibility Study
Fisheries and Food
1969–1970 Urwick Orr & Partners Ministry of Agriculture, Introduction of the principles of Management by
Fisheries and Food Objectives to senior managers in the Regional and
Divisional Organisation
1969–1970 A.I.C. Limited Civil Service Department A study of the pay structure at the highest levels in
the Civil Service
1969–1970 PA Management Consultants Ltd Civil Service Department Review of Catering Services
1969–1970 A.I.C. Limited Ministry of Defence An organisational review of the process of personnel
management in the three Services
1969–1970 A.I.C. Limited Ministry of Defence To develop a productivity indicator for HM Dockyards
1969–1970 PA Management Consultants Ltd Ministry of Defence Installation of Management/Productivity schemes at
Royal Air Force engineering and supply units
1969–1970 Urwick Orr & Partners Ministry of Defence To introduce Management by Objectives in HMS
Collingwood
1969–1970 Urwick Orr & Partners Ministry of Defence Organisation Study of Ammunition Production
1969 A.I.C. Limited Department of the A survey of the present organisation and a review of
Environment the financial resources of the Zoological Society of
London
1969 Urwick Orr & Partners Department of the The Transport Organisation of a typical Local
Environment Authority
1969–1970 Urwick Orr & Partners Department of Health and Assistance in introducing Management by Objectives
Appendix 2: Detailed Selection of Consultancy Assignments...

Social Security in the War Pension Organisation

1969–1970 A.I.C. Limited Home Office Organisational study of the Directorate of Industries
and Stores (Prison Department)
1969–1970 A.I.C. Limited Inland Revenue A survey of staff wastage
1969–1970 PA Management Consultants Ltd Scottish Home and Health A study in connection with the remuneration of
Department dispensing chemists
1969–1970 PA Management Consultants Ltd HMSO Incentive scheme at the HMSO bookshop in Manchester
1969–1970 PA Management Consultants Ltd HMSO Review of the Customers’ Accounts Section of the
London Bookshops
1969–1970 PA Management Consultants Ltd HMSO Incentive scheme at HMSO Warehouse in Edinburgh
1969–1970 PA Management Consultants Ltd Department of Trade and A survey of the Printing, Bookbinding and
Industry Paperconverting Machinery Industry
1969–1970 Urwick Technology Management Department of Trade and Two studies on the cost of metrication
Ltd Industry
1969 The Anne Shaw Organisation MPBW Work in Supplies Division
1970 P-E Consulting Group Ltd Department of the Review of Supplies Division in Engineering Depots
Environment and Workshops
1970 Urwick Orr & Partners Department of the A study of urban guide-lines in Rotherham
Environment
1970 Urwick Orr & Partners Department of the Management by Objectives and management
Environment development courses in Accounts Division
1970 PA Management Consultants Ltd Cheshire County Council Cost analysis of local government reform
1971 Urwick Orr & Partners Ministry of Agriculture, Management by Objectives-Preparatory exercise in
Fisheries and Food new regional organisation
1971 Inbucon/A.I.C. Ministry of Defence Feasibility study regarding job evaluation for the
Industrial Civil Service
1971 PA Management Consultants Ltd Ministry of Defence To study the feasibility of a new incentive bonus
scheme in the Royal Ordnance Factories at Chorley
and Glascoed
1971 Urwick Orr & Partners Ministry of Defence Introduction of Management by Objectives at RAF,
Brize Norton
1971 Urwick Orr & Partners Department of Employment To survey the advisory role of the Industrial Training
Boards
1971 Urwick Orr & Partners Department of the Preparation and conduct in management
  Appendix 2: Detailed Selection of Consultancy Assignments... 

Environment development courses in Accounts Division “A”

following introduction of Management by
Objectives
283

(continued)
Table A.1 (continued)
284 

Date
awarded Company Organisation Nature of assignment
1971 Urwick Orr & Partners Department of Health and Advice on establishment of Directorate for Social
Social Security Security
1971 Inbucon/A.I.C. Home Office Implementation of management control system in
relation to Prison Industries
1971 PA Management Consultants Ltd HMSO Financial incentive scheme for the retail and
wholesale booksellers’ organisation
1971 PA Management Consultants Ltd HMSO To study organisation and staffing structure of HMSO
Bookshops
1971 PA Management Consultants Ltd Department of Trade and To advise on the best use of Clydebank Yard
Industry
1972 PA Management Consultants Ltd Northern Ireland Finance Board member/staffing—to advise the Government
Corporation on how Northern Ireland industry could benefit
from the existence of off-shore oil
1972 Urwick Orr & Partners Ministry of Agriculture, Advice on the installation of MbO in the Divisional
Fisheries and Food Office at Oxford
1972 Inbucon/A.I.C. Ministry of Defence A comparative study of the use of multiple regression
analysis to assess labour requirements for domestic
cleaning in Army establishments
1972 Urwick Orr & Partners Ministry of Defence Introduction of MbO into the Quality Assurance
Directorate
1972 Urwick Orr & Partners Department of Health and Introduction of MbO into Central Office, Newcastle
Social Security upon Tyne
1972 Inbucon/A.I.C. Home Office Organisation and cost of fire prevention in a large
brigade
Appendix 2: Detailed Selection of Consultancy Assignments...

1972 P-E Consulting Group Ltd HMSO A preliminary review of printing establishments
1972 PA Management Consultants Ltd Department of Trade and Study of motor cycle industry world markets
Industry
1973 P-E Consulting Group Ltd Civil Service Department To determine and appraise the organisation of the
library service in Whitehall departments
1973 Urwick Orr & Partners Department of Employment To evaluate the vocational assessment scheme at
Bellshill Government Training Centre
1973 Harold Whitehead & Partners Ltd Department of Employment To survey job vacancies in employment exchanges
1973 P-E Consulting Group Ltd HMSO Strategic study of HMSO warehouse and distribution
organisation
1973 PA Management Consultants Ltd Department of Trade and A study of the UK ship repairing industry
Industry
1973 PA Management Consultants Ltd Department of Trade and A study of the UK carpet industry
Industry
1974 Inbucon/A.I.C. Ministry of Defence To study management control and information in the
field of naval material management
1974 PA Management Consultants Ltd Department of the Improving promotional effectiveness of Housing
Environment Development Directorate
1974 Inbucon/A.I.C. Department of Health and Development of a national incentive bonus scheme
Social Security for the ambulance service
1974 Inbucon/A.I.C. Department of Industry To assess the possible use of the factory and labour
force of a Kirby development
1974 P-E Consulting Group Ltd Department of Industry To study marketing techniques at Warren Spring
Laboratory
1974 Inbucon Ltd National Economic Career development in retail distribution
Development Council
1974 P-E Consulting Group Ltd National Economic Productivity survey of management engineering
Development Council industry
1974 P-E Consulting Group Ltd National Economic Marketing information system for textile and
Development Council garment manufacturers and distributors in clothing
and wool textile
1975 P-E Consulting Group Ltd Department of the To assist in the introduction of a pilot incentive scheme
Environment for industrial staff employed in works services
  Appendix 2: Detailed Selection of Consultancy Assignments... 

1975 PA Management Consultants Ltd Department of the Further work on rural lorry users study
Environment
(continued)
285
Table A.1 (continued)
286 

Date
awarded Company Organisation Nature of assignment
1975 Inbucon/A.I.C. Department of the To review the method of assessing the fee for the
Environment annual “MOT Test”
1975 Urwick Orr & Partners Department of Industry To study the future survival of Imperial Typewriters
Ltd
1975 P-E Consulting Group Ltd Department of Industry To study the market for hydraulic motors
1975 PA Management Consultants Ltd Department of Industry Supply of edited technological case studies
1975 Inbucon/A.I.C. Department for Northern Marketing assignment—Northern Ireland firm
Ireland
1975 Inbucon/A.I.C. Department for Northern Industry prospects for West Belfast
Ireland
1976 Inbucon/A.I.C. Ministry of Defence To install work measurement techniques at Royal
Electrical and Mechanical Engineers Darlington
1977 Inbucon/A.I.C. Ministry of Defence Further work on measurement techniques at
Donnington-survey of Command and Central
Workshops
1977 PA Management Consultants Ltd Department of Industry Study of possible commercial and industrial
revitalisation of Port of Liverpool (Inner Merseyside)
area
1977 PA Management Consultants Ltd Department of Employment Preliminary study of major administrative procedures
for introducing new special programmes for the
unemployed
1977 PA Management Consultants Ltd Royal Ordnance Factories Re-assessing production technology at Royal Small
Arms Factory Enfield
1977 Inbucon Ltd National Economic Proposals for usage of imported motors in UK and
Appendix 2: Detailed Selection of Consultancy Assignments...

Development Council potential import substitution

1977 Inbucon Ltd National Economic Productivity improvement case studies
Development Council
1978 PA Management Consultants Ltd Ministry of Defence Feasibility study of a work measured incentive
scheme at Royal Ordnance Factory Bridgewater
1978 Inbucon Ltd Department of Health and Field study of the Lambeth, Southwark and Lewisham
Social Security Area Health Authorities
1978 Inbucon Ltd Home Office To identify six plastic products for bone craven
injection moulding machines in Prison Industries
1978 PA Management Consultants Ltd Department of Industry Study of computer distributed database technology
1978 PA Management Consultants Ltd Department of Industry Assistance with microprocessors awareness
programme
1978 P-E Consulting Group Ltd Manpower Services Survey into training office staff for overseas trade
Commission
1978 Inbucon Ltd Manpower Services Assessing criteria for the evaluation of the Direction
Commission of Training
1978 Inbucon Ltd HMSO Feasibility study of an incentive bonus scheme at the
Government printing works at Gateshead
1979 PA Management Consultants Ltd Civil Service Department Review of resource and organisational implications of
Arrest and Summons
1979 Inbucon Ltd Health and Safety Executive A preliminary study of grading staff in Health and
Safety Executive
1979 Inbucon Ltd Department of the House of Grading review covering the staff of all the
Commons Departments of the House of Commons
1979 PA Management Consultants Ltd Department for Northern Cross-border study of the Erne catchment area
Ireland
1980 PA Management Consultants Ltd Ministry of Agriculture, Land Settlement Association scheme
Fisheries and Food
1980 PA Management Consultants Ltd Ministry of Defence Self-financing productivity scheme at Clyde
Submarine base
1980 P-E Consulting Group Ltd Department of the Funding of Building Research Establishment
Environment
1980 PA Computer & Department of Industry Commercial exploitation of software systems
  Appendix 2: Detailed Selection of Consultancy Assignments... 

Telecommunications Ltd
1980 Inbucon Ltd Department of Industry Feasibility of National Maritime Institute of
independent entity
287

(continued)
Table A.1 (continued)
288 

Date
awarded Company Organisation Nature of assignment
1980 PA Management Consultants Ltd Department of Industry Future development of National Engineering
Laboratory
1980 Inbucon Ltd HMSO Incentive bonus scheme at Harrow Press
1980 Urwick Orr & Partners Department of Trade Cost control study of manual workers’ operations by
selected water authorities
1980 Inbucon Ltd National Economic Improvement of labour efficiency in retail stores
Development Council
1980 Inbucon Ltd National Maritime Institute Privatisation feasibility study
1980 P-E Consulting Group Ltd Building Research Financial implications of privatisation
Establishment
1980 P-E Consulting Group Ltd Post Office Reports on the pilot scheme of an integrated
premium services network
1980 PA Management Consultants Ltd Ministry of Defence Feasibility study for a self-financing productivity
scheme at Clyde submarine base, followed by work
to introduce the scheme
1980 The Anne Shaw Organisation Department for Social Services A study of the arrangements for determining staffing
levels in certain areas of DHSS Newcastle Central
Office
1980 P-E Consulting Group Ltd Department for Northern To identify, screen, and evaluate Potential
Ireland diversification opportunities for Harland and Wolff
1980 PA Management Consultants Ltd Ministry of Agriculture, Provision of centralised services to tenant growers on
Fisheries and Food the Land Settlement Association estates
1981 Inbucon Ltd National Economic Advanced material handling systems
Development Council
Appendix 2: Detailed Selection of Consultancy Assignments...

1981 Inbucon Ltd National Economic Productivity improvement programme in UK

Development Council
1981 P-E Consulting Group Ltd National Economic
Development Council
1981 P-E Consulting Group Ltd Department for Northern
Ireland
electronic components industry
Examples of success with computers in production
control
Harland and Wolff— Production capacity study
1981 PA Management Consultants Ltd Ministry of Agriculture, Management structure of the Land Settlement
Fisheries and Food Association
1981 Inbucon Ltd Department for the British Waterways Board study
Environment
1983 Inbucon Ltd Post Office Business plan for counter services division
1983 P-E Consulting Group Ltd National Economic International study of efficiency
Development Council
1983 PA Management Consultants Ltd European Commission Investment and marketing in Japan by European
companies
1983 Inbucon Ltd Department for the Review of operation of Directorate of Ancient
Environment Monuments and Historic Buildings (Works)
1983 PA Management Consultants Ltd Ministry of Defence To examine naval aircraft support methods
1983 Harold Whitehead & Partners Ltd Ministry of Defence Review of productivity scheme at royal naval aircraft
workshop, Perth
1983 PA Management Consultants Ltd Ministry of Defence Review of productivity scheme at 27 command
workshop, REME
1983 PA Computer & Ministry of Defence To review existing Systems and Facilities and make
Telecommunications Ltd recommendations
1983 P-E Consulting Group Ltd Department for Trade and Application of information technology in local
Industry authorities’ administration
1983 Production Engineering Research Department for Trade and Administration of Quality Assurance Advisory Service
Association Industry
1983 PA Management Consultants Ltd HM Treasury Identification of Computer Applications
1984 Inbucon Ltd Department of Health and Study of the wheelchair service by Inbucon
Social Security management consultants for the DHSS
1984 PA Consulting Services Ltd Department for Social Services Work on the United Kingdom Transplant Service
(UKTS) Replacement Computer Project
1984 PA Consulting Services Ltd Department for Trade and Potential Japanese Investment in United Kingdom
  Appendix 2: Detailed Selection of Consultancy Assignments... 

Industry
1984–1985 Inbucon Ltd Department for the Royal Parks Study
Environment
289

(continued)
Table A.1 (continued)
290 

Date
awarded Company Organisation Nature of assignment
1985 P-E Consulting Group Ltd National Economic Consultancy study on advanced handling systems
Development Council
1985 PA Management Consultants Ltd Department for Energy Study of energy efficiency in local government
buildings
1985 PA Management Consultants Ltd Ministry of Defence Business Management Systems at HM Dockyard,
Rosyth
1985 PE Information Systems Ltd Ministry of Defence Study of mechanical factory production, HM
Dockyard, Rosyth
1985 P-E Consulting Group Ltd Ministry of Defence Study of Production Control, HM Dockyard, Rosyth
1985–1986 INBUCON/LUC Department for the Resource plan and staffing model for the Royal Parks
Environment
1985 PA Consulting Services Ltd Department for Trade and Management of Office Automation Publicity Campaign
Industry
1986 Inbucon Ltd Scottish Office Redesign of central module of Financial Management
Initiative
1986 Inbucon Ltd Scottish Office Design and Specification of a Management Control and
Information System for National Galleries (Scotland)
1986 PA Management Consultants Ltd North Western Regional Report on Salford Health Authority
Health Authority
1986 PE Information Systems Ltd Lord Chancellor’s Department Communications specification for Court Funds
Accounting System
1986 PA Management Consultants Ltd Paymaster General Consultancy Services to the Inner Cities Initiative both
in respect of evaluating the progress of the
initiative and helping the Inner City task forces
Appendix 2: Detailed Selection of Consultancy Assignments...

develop projects in their areas

1986 Inbucon Ltd Department for Scotland Study of Financial Management. Scottish
Development Agency
1986 PA Computer & Lord Advocate’s Department To assess the financial and product viability of Inslaw
Telecommunications Ltd Inc. of America
1986 P-E Consulting Group Ltd Department for Trade and Advice on Patent Office Organisation
Industry
1986 PA Consulting Services Ltd Department for Energy Advice on local government energy management in
Scotland
1986 PA Computer & Home Office Study of network migration to police national
Telecommunications Ltd computer project
1986 PA Computer & Home Office Future developments of computer system in
Telecommunications Ltd Magistrates Courts
1986 PA Consulting Services Ltd HM Treasury Study of departmental non-voice telecommunications
1986 Harold Whitehead & Partners Ltd Ministry of Defence Consultancy assistance for the MOD’s Management
Services (Organisation) Division
1986 Harold Whitehead & Partners Ltd Ministry of Defence Review of Productivity Scheme at Central Engineer
Park, Long Marston
1986 PA Management Consultants Ltd Ministry of Defence Equipment Maintenance Study for Quarter Master
General
1986 PA Management Consultants Ltd Ministry of Defence Study into the maintenance and control of major
repairable units of air stores for Director General
Aircraft (Navy)
1986 PA Management Consultants Ltd Ministry of Defence Consultancy assistance for the project team, Director
General Aircraft (Navy)
1986 PA Management Consultants Ltd Ministry of Defence Study to review capacity management, Director
General Aircraft (Navy)
1986 PA Management Consultants Ltd Ministry of Defence Business Management Systems Study at Rosyth Dockyard
1986 P-E Consulting Group Ltd Ministry of Defence Business Management Systems Study at Devonport
Dockyard
1986 P-E Consulting Group Ltd Ministry of Defence Implementation of Protection Control at Rosyth
Dockyard
1986 P-E Consulting Group Ltd Department for Social Services Budgetary Control System (Computer Support Review)
  Appendix 2: Detailed Selection of Consultancy Assignments... 

(continued)
291
Table A.1 (continued)
292 

Date
awarded Company Organisation Nature of assignment
1986 PA Management Consultants Ltd Northern Ireland Office To assess the implications of introducing the Home
Office “Fresh Start” proposals for the prison service
in England and Wales into the Northern Ireland
prison service
1987 Harold Whitehead & Partners Ltd Ministry of Defence Productivity Scheme Review at Royal Ordnance
Factory, Cardiff
1987 Harold Whitehead & Partners Ltd Ministry of Defence Review of the Senior Management Structure of the
Royal Navy Stores
1987 Harold Whitehead & Partners Ltd Ministry of Defence Assistance with the Review of the RAF Maintenance
Executive
1987 Harold Whitehead & Partners Ltd Ministry of Defence Productivity Schemes Review of Central Ordnance
Depot, Bicester
1987 PA Consulting Services Ltd Ministry of Defence Assistance with the Quarter Master General’s
Equipment Maintenance Study
1987 PA Consulting Services Ltd Ministry of Defence Study to Review Consumable Stores Management—
Director General Aircraft (Navy)
1987 PA Consulting Services Ltd Ministry of Defence Phase 2 of the Rotables Study—Director General
Aircraft (Navy)
1987 PA Consulting Services Ltd Ministry of Defence Consultancy Study to Define a Repair Policy Analysis
Methodology—Director General Aircraft (Navy)
1987 PA Consulting Services Ltd Ministry of Defence Rosyth Dockyard Commercial Material Systems
1987 P-E Consulting Group Ltd Cabinet Office Study into future development of the Civil Service
College Administrative Computer System
1987 PA Computer & Department for the Advice on development of software for IT Strategy
Appendix 2: Detailed Selection of Consultancy Assignments...

Telecommunications Ltd Environment

a
From the late 1960s AIC became Inbucon/AIC and in the early 1970s just Inbucon. The other “Big Four” firms were Production Engineering
Limited (later P-E Consulting Group); Personnel Administration (later PA Management Consultants and PA Consulting Group); and
Urwick Orr & Partners. The work of the Anne Shaw Organisation Ltd. and Harold Whitehead & Partners Ltd. is also included
Table A.2  Detailed selection of state consultancy assignments by American generation firms, 1960s–1970sa
Date awarded Company Organisation Nature of assignment
1962 McKinsey & Co. Atomic Energy Authority Reorganisation
1962 Booz Allen & Hamilton National Economic Development Use of private companies on assignments for NEDO
International NV Council
1963 McKinsey & Co. Ministry of Transport Advisory services
1965–1967 Arthur D. Little Ltd Ministry of Aviation Review of American experience in the application of
technological developments arising out of
Government sponsored aerospace programmes
1965 Arthur D. Little Ltd Denham Committee for British Examining feasibility of establishing export
National Export Council corporations for the west coast of America and
West Germany
1966 McKinsey & Co. Post Office Advisory services
1966 McKinsey & Co. National Coal Board Management structure organisation
1966 Arthur D. Little Ltd Department of Economic Affairs Report on Belfast aircraft manufacturers Short Bros.
and Harland
1967 McKinsey & Co. Department for Transport Advisory services
1967 McKinsey & Co. British Transport Docks Board Rationalisation programme
1967 Arthur D. Little Ltd and Department of Economic Affairs Report for National Economic Development Council
A.I.C. Ltd (“Neddy”) on Electrical Engineering
1968 McKinsey & Co. Bank of England Reorganisation
1968 McKinsey & Co. Gas Council Reorganisation
1968 McKinsey & Co. British Rail Reorganisation
1968 Booz Allen & Hamilton Department of Health and Social Minor advice on organisation structure
International NV Security
1968 McKinsey & Co. British Railways Board Advisory services
1969 McKinsey & Co. NHS Report
  Appendix 2: Detailed Selection of Consultancy Assignments... 

1969 Booz Allen & Hamilton Bow Group Advisory services

International NV
1969 Booz Allen & Hamilton Conservative Party Advisory services
International NV
293

(continued)
Table A.2 (continued)
294 

Date awarded Company Organisation Nature of assignment

1969 Booz Allen & Hamilton Islington council Reorganisation
International NV
1969–1970 McKinsey & Co. Department of Health and Social Organisational Review of the Health Divisions
Security
1970 McKinsey & Co. BBC Reorganisation
1970 McKinsey & Co. Hull Council Advisory services
1970 McKinsey & Co. British Transport Commission Advisory services
1970 McKinsey & Co. Department of the Environment A study of urban guide-lines in Sunderland
1970 Arthur D. Little Ltd National Economic Development Report on US “brain drain” for Management
Council Education, Training and Development Committee
1970 McKinsey & Co. United Oxford Hospitals Reorganisation of hospital management structure
1971 McKinsey & Co. Thames Board Mills Advisory services
1971 McKinsey & Co. Department of Trade and Industry Advisory services
1971 Booz Allen & Hamilton Department of Education and Survey of the organisation and management of the
International NV Science British Museum
1971 McKinsey & Co. Department of Health and Social Review of internal organisation and management
Security arrangements for proposed new Health Authorities
1971 McKinsey & Co. Department of Trade and Industry Review of the financial position and development
plans of a nationalised industry
1971 McKinsey & Co. Welsh Office Advisory services
1971 McKinsey & Co. Department of Health and Social Reorganisation of social services department
Security
1971 McKinsey & Co. NHS Reorganisation of NHS
1971 McKinsey & Co. Foreign Office Management structure organisation
1972 Booz Allen & Hamilton HM Government Strategy
Appendix 2: Detailed Selection of Consultancy Assignments...

International NV
1972 Booz Allen & Hamilton Department of Trade and Industry A study of the UK shipbuilding industry
International NV
1973 Booz Allen & Hamilton Department of Trade and Industry Shipbuilding
International NV
1973 McKinsey & Co. Merseyside Metropolitan County Reorganisation
Council
1973 McKinsey & Co. Surrey County Council Advisory services
1973 McKinsey & Co. Hull Corporation Reorganisation
1973 McKinsey & Co. Foreign Office Advisory services
1973 McKinsey & Co. Cabinet Office Analysis of social affairs programmes and the
development and presentation of conclusions and
recommendations
1973 McKinsey & Co. Department of Employment To determine a programme and budget for the
Training Services Agency
1973 Boston Consulting Group Department of Trade and Industry A study of the implication for the UK of changes in
Ltd the Japanese economy
1974 Boston Consulting Group Department of Trade and Industry Industrial competition
Ltd
1974 McKinsey & Co. National Economic Development Industry export prospects for 1977
Council
1974 McKinsey & Co. Department of the Environment Review of local authority management information
systems
1974 McKinsey & Co. Department of Health and Social To assist in NHS planning systems in compiling a
Security guide to corporate planning in the NHS
1974 Booz Allen & Hamilton National Economic Development Shipbuilding and ship repairing
International NV Council
1974 Boston Consulting Group Foreign Office Study on future of Japan
Ltd
1975 McKinsey & Co. Cabinet Office Long-term study of the motor car industry
1975 Boston Consulting Group Department of Industry To undertake a study of the world motor cycle
Ltd industry
1976 McKinsey & Co. Department of Health and Social Advisory services
  Appendix 2: Detailed Selection of Consultancy Assignments... 

Security
1976 McKinsey & Co. Home Office Advisory services

(continued)
295
Table A.2 (continued)
296 

Date awarded Company Organisation Nature of assignment

1976 McKinsey & Co. Royal Commission on the Evidence to Commission
Distribution of Incomes and
Wealth
1976 Booz Allen & Hamilton Cabinet Office Study of the UK power plant equipment industry
International NV
1976 McKinsey & Co. Department for Northern Ireland Board and management structure assignment of a
public owned company
1978 McKinsey & Co. National Economic Development Advisory services
Council
1978 McKinsey & Co. National Economic Development Strategy options
Council
1979 McKinsey & Co. National Economic Development Strategy options
Council
1979 Boston Consulting Group National Economic Development Prospects and opportunities for UK tyre industry
Ltd Council
1981 McKinsey & Co. Westminster County Council Efficiency savings
1983 McKinsey & Co. Audit Commission Board member/Chief Executive/Efficiency expert
1983 McKinsey & Co. National Coal Board Reorganisation
1983 McKinsey & Co. National Coal Board Organisational change
1983 Booz Allen & Hamilton British Railways Board International performance comparisons: railway
International NV investment
1983 A. T. Kearney Ltd. Department for Trade and Industry Application of information technology in commerce
and industry.
1985 McKinsey & Co. National Coal Board Advisory services
1992 McKinsey & Co. British Transport Commission Privatisation strategy
Appendix 2: Detailed Selection of Consultancy Assignments...

1993 McKinsey & Co. British Railways Privatisation strategy

1994 McKinsey & Co. Tate Gallery Developing the Tate
a
Firms included are Arthur D. Little, Booz Allen Hamilton, Boston Consulting Group, and McKinsey & Company
Table A.3  Detailed selection of state consultancy assignments by consultancy firms of accountancy generation, 1970s–1990s
Date awarded Company Organisation Nature of assignment
1970 Deloitte, Robson Morrow & Co Department of the Environment Management Accounting in Supplies Division
1970 Peat, Marwick, Mitchell Department of the Environment Management accounting in “New Towns”
1971 Cooper Brothers and Company Department of Health and Social Costing study of a chemical pathological
Security laboratory
1971 Peat, Marwick, Mitchell Home Office Pilot study on the cost effectiveness of salvage at
fires
1971 Cooper Brothers and Company Ministry of Posts and To advise on the finances of the Post Office Giro
Telecommunications
1971 Cooper Brothers and Company Department of Trade and To consider the position and future prospects of a
Industry major engineering company
1971 Price Waterhouse Company Department of Trade and Review of the staffing and organisation of the
Industry Insolvency Service
1971 Cooper Brothers and Company HM Treasury Simplification of personal tax system
1972 Cooper Brothers and Company Ministry of Agriculture, Fisheries
A study of the arrangements for implementing
and Food certain intervention subsidies
1972 Peat, Marwick, Mitchell Department of the Environment Written report on an outline financial planning
model for New Towns developed during an
earlier consultancy
1972 Arthur Andersen & Co. Department of Health and Social To construct an out-patient care event model
Security
1972 Peat, Marwick, Mitchell Home Office Feasibility study of the cost effectiveness of fire
prevention measures
1974 Coopers & Lybrand Associates Ltd National Coal Board Staffing
1974 Peat, Marwick, Mitchell Department of the Environment To advise Department of the Environment, HM
Treasury and British Railways Board on aspects
  Appendix 2: Detailed Selection of Consultancy Assignments... 

of the new Railways Support Grant

1974 Peat, Marwick, Mitchell Department of Health and Social Use of pathology laboratory simulation model at
Security the University Hospital of Wales and Poole
District General Hospital
297

(continued)
Table A.3 (continued)
298 

Date awarded Company Organisation Nature of assignment

1974 Arthur Andersen & Co. Department of Health and Social Development of criteria for decisions on
Security upgrading hospital building stock
1974 Arthur Andersen & Co. Department of Industry To make preliminary report on prospects for
investment in UK by Danish industry
1974–75 Arthur Andersen & Co. Department of Industry Assistance in connection with financial
information systems
1974 Coopers & Lybrand Associates Department for Northern Ireland Financial investigation and management
Ltd appraisal—Northern Ireland engineering firm
1975 Coopers & Lybrand Associates Department of the Environment To examine the financing of the Central YMCA
Ltd building project
1975 Coopers & Lybrand Associates Department of Health and Social To review and update stage III of 1971–1972
Ltd Security costing study of pathology laboratories in the
National Health Service
1975 Arthur Andersen & Co. HM Treasury To assist with revised financial information
systems for central government expenditure on
votes
1975 Coopers & Lybrand Associates Department for Industry Study of Chrysler
Ltd
1977 Arthur Andersen & Co. Department of Transport Research project on crew costs of bus operations
1977 Price Waterhouse Associates Department of Transport Further work on study of the finances of the Port
of London Authority
1978 Arthur Young Ministry of Defence To devise a management system for monitoring
the development of a round of ammunition
1978 Coopers & Lybrand Associates Department of Industry Feasibility study of proposed merchandise mart at
Ltd Surrey Docks
Appendix 2: Detailed Selection of Consultancy Assignments...

1978 Arthur Andersen & Co. Lord Chancellor’s Department Study of computer audit in magistrates’ courts
1979 Arthur Andersen & Co. Civil Service Department Review of resource and organisational
implications of possible changes in the
Prosecution System
1979 Deloitte Haskins and Sells Department of the Environment Feasibility study to compare costs with those of
outside organisations
1979 Coopers & Lybrand Associates Ltd Department of Industry Study of demand for small factory premises
1979 Arthur Young Inland Revenue A study of the possible taxation of
unemployment benefits
1979 Coopers & Lybrand Associates Manpower Services Commission Feasibility study for the unification of MSC
Ltd Accounts
1979 Peat, Marwick, Mitchell Scottish Office Cost investigation of milk distributors’ profit
margins
1979 Peat, Marwick, Mitchell Department for Education and Review of financial systems
Science
1979–1982 Peat, Marwick, Mitchell Department of Industry Advice on corporate plans of an industrial company
1979–1982 Touche Ross & Co. Department of Industry Review of the Department’s financial information
system
1979–1982 Coopers & Lybrand Associates Department of Industry Rationalisation of steel wire drawing industry
Ltd
1979–1982 Deloitte Haskins and Sells Department of Industry Heavy steel forgings rationalisation scheme
1979–1982 Deloitte Haskins and Sells Department of Industry Rationalisation of cold rolled narrow strip steel
manufacturing
1979 Arthur Andersen & Co. Department for Northern Ireland A review of industrial development institutions
and incentives
1979 Peat, Marwick, Mitchell Department of Trade Review of departmental administrative forms
1980 Coopers & Lybrand Associates Department of the Environment Accounting and financial system and related
Ltd studies for the London and Merseyside
Docklands UDC
1980 Coopers & Lybrand Associates Ltd Department of Trade CEGB’s investment appraisal methods
1980 Arthur Young Home Office Advice to the Prison Department on a costing
system and to the Directorate of Industries and
  Appendix 2: Detailed Selection of Consultancy Assignments... 

Farms on organisational structure, management

information and accountancy systems and
profitability
299

(continued)
Table A.3 (continued)
300 

Date awarded Company Organisation Nature of assignment

1981 Coopers & Lybrand Associates Home Office Advice on police expenditure
Ltd
1981 Peat, Marwick, Mitchell Department for the Environment Assistance with Rayner scrutiny of running costs
in of the Department of the Environment
(Central) and follow-up
1981 Coopers & Lybrand Associates Department for the Environment Preparation of business plan for Hydraulics
Ltd Research Station
1982 Peat, Marwick, Mitchell British Railways Board Report
1982 Peat, Marwick, Mitchell Department of Energy Efficiency study of UK Atomic Energy Authority
1982 Coopers & Lybrand Associates Department for Northern Ireland Investigation of affairs of De Lorean Motor
Ltd Company
1982 Coopers & Lybrand Associates Department for Northern Ireland Investigation of financial affairs of firm in
Ltd receivership
1982 Arthur Young Department of Trade Review of tourist board operation and efficiency
1982 Deloitte Haskins and Sells Department for the Environment Review of Contracts work in PSA
1982 Touche Ross & Co. Department for the Environment Inquiry into safeguards against fraud and
corruption
1982 Coopers & Lybrand Associates Department for the Environment Advice to London Zoo Study Team
Ltd
1982 Coopers & Lybrand Associates Department for the Environment Financial Management in the Directorate of
Ltd Ancient Monuments and Historic Buildings
1983 Coopers & Lybrand Associates Unknown Reports into local authority reform—potential
Ltd abolition of six metropolitan county councils
1983 Arthur Young McLelland Department for the Environment National Parks Efficiency Review Stages I and II
Moores & Co.
Appendix 2: Detailed Selection of Consultancy Assignments...

1983 Deloitte Haskins and Sells Department for the Environment Restructuring of PSA and Review of Contracts
Directorate
1983 Arthur Andersen & Co. Department for Social Services Progress Management for the Department’s
Operational Strategy
1983 Deloitte Haskins and Sells Ministry of Defence To carry out a study into the long-term future of
the Queen Victoria School, Dunblane, and the
Duke of York’s Royal Military School, Dover
1983 Arthur Andersen & Co. Department for Trade and Advice on local area network system in Alvey
Industry Directorate
1983 Coopers & Lybrand Associates Department for Trade and Effects of public sector provision of industrial
Ltd Industry premises
1983 Price Waterhouse Associates Department for Trade and Audit of computer system.
Industry
1983 Touche Ross & Co. Department for Trade and Financial appraisal of a company
Industry
1984 Deloitte Haskins and Sells Independent schools Reports
1984 Coopers & Lybrand Associates Department for Employment Implementation of Management Information
Ltd Systems for the Skillcentre Training Agency
1984 Arthur Young Department for Employment Applicability & Feasibility of Data Dictionary
System within MSC
1984–1985 Arthur Andersen & Co. Department of the Environment Study of recovered planning appeals
1984–1985 Coopers & Lybrand Associates Department of the Environment Ad hoc advice on an internal review of the work
Ltd and staffing levels of the Department
management information for ministers (MINIS)
1984–1985 Touche Ross & Co. Department of the Environment Review of the management and expenditure
information system (MAXIS).
1984–1985 Deloitte Haskins and Sells Department of the Environment Advice on improvements to financial
management and control procedures within
public service agreements
1984–1985 Deloitte Haskins and Sells Department of the Environment London region
1984 Arthur Andersen & Co. Department for Social Services Progress management for the operational
research service of the Department
  Appendix 2: Detailed Selection of Consultancy Assignments... 

1984 Arthur Andersen & Co. Department for Social Services Terminal replacement inquiry service
1984 Deloitte Haskins and Sells Department for Social Services Study on losses of supplies in a NHS hospital

(continued)
301
Table A.3 (continued)
302 

Date awarded Company Organisation Nature of assignment

1984 Peat, Marwick, Mitchell Department for Social Services To advise the operational research service of the
Department in connection with quality control
of its computer programming and thus to
facilitate the propagation of programmes
1984 Price Waterhouse Associates Department for Social Services Budgetary control system. To advise the
Department on administrative expenditure
covering management units in HQ, two central
offices, and the regional organisation
1984 Peat, Marwick, Mitchell Ministry of Defence Management Audit of Director General of
Defence Contracts assistance with the Technical
costs phase
1984–1985 Deloitte Haskins and Sells Welsh Office Advisory services
1984 Arthur Andersen & Co. Home Office To advise on the working procedures, staffing
and structure of the Crown Prosecution Service
1984 Coopers & Lybrand Associates Home Office Review of the commercial relationship between
Ltd the Prison Service Industries and Farms and
Customers
1984 Coopers & Lybrand Associates Home Office Study of an accounting and reporting framework
Ltd for the Directorate of Telecommunications
1984 Touche Ross & Co. Department for Social Services Management Information System
1984 Arthur Young Department for Social Services Management Budgeting, North Tees and
Southmead Health Authorities
1984 Coopers & Lybrand Associates Department for Social Services Management Budgeting, Ealing and Basingstoke
Ltd Health Authorities
1984 Arthur Andersen & Co. Department for Social Services Use of Computers in the Family Practitioner
Appendix 2: Detailed Selection of Consultancy Assignments...

Services
1984 Peat, Marwick, Mitchell Department for Social Services Computer Programming Standards
1984 Arthur Young Department for Social Services Advice on alignment of benefit periods
1984 Touche Ross & Co. Department for Trade and Review of Special Steels Industry
Industry
1984 Price Waterhouse Associates HM Treasury IT Strategy Study of the Office of Manpower
Economics
1984–1985 Coopers & Lybrand Associates Department for the Environment Review of National Heritage memorial fund
Ltd
1984–1985 Deloitte Haskins and Sells Department for the Environment London region advice
1985 Coopers & Lybrand Associates Law Society Advisory services
Ltd
1985 Touche Ross & Co. Department for Energy Accountancy and tax advice in respect of the
privatisation of the gas industry
1985 Arthur Andersen & Co. Ministry of Defence Accountancy advice
1985 Arthur Young Ministry of Defence Study work on Service B Vehicle holdings
1985 Arthur Young Ministry of Defence Replacement Policy for Engineering and
Construction Vehicles
1985 Deloitte Haskins and Sells Ministry of Defence Requisitioning and contracting procedures within
the Army Department
1985 Price Waterhouse Associates Ministry of Defence Review of spares support for industrial repair of
RAF managed equipment
1985 Price Waterhouse Associates Ministry of Defence Implementation of interim management
measures at HM Dockyards
1985 Price Waterhouse Associates Ministry of Defence To review operating procedures in the Civilian
Travel Claims Section
1985 Touche Ross & Co. Ministry of Defence Study of Dockyard Accounting arrangements
1985 Price Waterhouse Associates Home Office Tasks related to a computer accounting system
and marketing organisation in Prison Service
Industries and Farms
1985–1986 Arthur Young Grampian Health Board Advisory services
1985–1986 Price Waterhouse Associates Department for the Environment Residuary Body Implementation Plan—Greater
London
  Appendix 2: Detailed Selection of Consultancy Assignments... 

1985–1986 Peat, Marwick, Mitchell Department for the Environment Residuary Bodies Implementation Plans—
Metropolitan Counties
1985–1986 Touche Ross & Co. Department for the Environment Report on National Cyrenians
303

(continued)
Table A.3 (continued)
304 

Date awarded Company Organisation Nature of assignment

1985–1986 Coopers & Lybrand Associates Department for the Environment Preparation of Business Plan for Thamesmead
Ltd Town
1985–1986 Price Waterhouse Urwick Department for the Environment Management skills and procedure training
1985–1986 Ernst and Whinney Department for the Environment Review of Stockbridge Village Trust Ltd
1985–1986 Touche Ross & Co. Department for the Environment Advice on in-house transfer of Management of
Administrative Expenditure Information Systems
(MAXIS)
1985–1986 Deloitte Haskins and Sells Department for the Environment Advice on implementation of new financial
regime for new towns following New Towns
and Urban Development Corporations Act 1985
1985–1986 Coopers & Lybrand Associates Department for the Environment National Heritage Memorial fund long-term
Ltd funding
1985–1986 Touche Ross & Co. Department for the Environment Civic Trust review
1985–1986 Peat, Marwick, Mitchell Department for the Environment Management study of the Royal Armouries
1985–1986 Deloitte Haskins and Sells Department for the Environment Special advice to the Principal Finance Officer
1985–1986 Touche Ross & Co. Department for the Environment PSA internal audit consultants
1985–1986 Coopers & Lybrand Associates Department for the Environment Consultancy support to PSA information
Ltd technology committees
1985 Touche Ross & Co. Department for Trade and Industry Study
Industry
1986 Touche Ross & Co. Northern Ireland Office Report on performance and costs in shipbuilding
1986 Ernst and Whinney Department for Social Services Report on movement of costs specific to nursing
and residential homes
1986 Coopers & Lybrand Associates Scottish Home and Health To advise on management arrangements in the
Ltd Department health service in Scotland
Appendix 2: Detailed Selection of Consultancy Assignments...

1986 Coopers & Lybrand Associates Lord Chancellor’s Department Civil Justice Review: study of commercial court
Ltd
1986 Peat, Marwick, Mitchell Lord Chancellor’s Department Computer project support
1986 Arthur Andersen & Co. Paymaster General Planning support in development of user
requirement for replacement computer system
for Unemployment Benefit Service
1986 Deloitte Haskins and Sells Paymaster General Advice to Small Firms and Tourism Division on
Financial Management Review of British Tourist
Authority/English Tourist Board
1986 Coopers & Lybrand Associates Department for Scotland Provision of Training Sessions on Marketing
Ltd Awareness for the Custodial Staff in the Historic
Buildings and Monuments Directorate
1986 Ernst and Whinney Department for Scotland Study into Management Organisation and
Procedures appropriate to the Scottish Legal Aid
Board
1986 Arthur Young Department for Transport Audit of the accounts of the Civil Aviation
Authority
1986 Arthur Young Department for Transport Preparation of accounts for the General
Lighthouse Fund
1986 Peat, Marwick, Mitchell Department for Transport Joint management review of the Woolwich Ferry
and associated tunnels (with Greenwich LB)
1986 Price Waterhouse Associates Department for Transport Audit of the accounts of the British Railways
Board
1986 Price Waterhouse Associates Department for Transport Accounting advice in respect of the setting up of
Public Airport Companies under the Airports Act
1986
1986 Touche Ross & Co. Department for Transport Advice on the proposed disposal of British
Transport Advertising
1986 Coopers & Lybrand Associates Department for Trade and Financial Appraisal
Ltd Industry
1986 Coopers & Lybrand Associates Department for Trade and United Kingdom Space Programmes Study
  Appendix 2: Detailed Selection of Consultancy Assignments... 

Ltd Industry
1986 Deloitte Haskins and Sells Department for Trade and Railway Survey
Industry
305

(continued)
Table A.3 (continued)
306 

Date awarded Company Organisation Nature of assignment

1986 Touche Ross & Co. Department for Trade and Railway Staff Training Assessment
Industry
1986 Peat, Marwick, Mitchell Department for Energy Study of the methodology used by the UK Atomic
Energy Authority in recording pre-Trading Fund
decommissioning and radioactive waste
management liabilities
1986 Price Waterhouse Associates Department for Energy Development of reservoir engineering database
1986 Price Waterhouse Associates Department for Energy Advice on US, Canadian, and Japanese accounting
conventions for British Gas sale offer
1986 Coopers & Lybrand Associates Home Office Study into future provision of training for
Ltd Magistrates Courts staff
1986 Price Waterhouse Associates Home Office Implementation of computer systems in Home
Office Prison Department
1986 Touche Ross & Co. Home Office Study on scientific support for the police service
in England and Wales
1986 Arthur Young Department for Education and Provision of advice as part of the Department’s
Science financial management review of the Secondary
Examinations Council and School Curriculum
Development Committee
1986 Touche Ross & Co. Department for Education and Production of the long form report for the sale of
Science part of the Plant Breeding Institute and the
National Seed Development Organisation
1986 Coopers & Lybrand Associates Department for the Civil Service Development of policy evaluation
Ltd
1986 Peat, Marwick, Mitchell Ministry of Agriculture Management Accountancy Information System
Appendix 2: Detailed Selection of Consultancy Assignments...

1986 Touche Ross & Co. Ministry of Agriculture Dairy Crest Foods
1986 Arthur Young Ministry of Defence Study into the future of the Defence School of
Music
1986 Arthur Young Ministry of Defence Implementation assistance following the
recommendations of the “B” vehicle study
1986 Arthur Young Ministry of Defence Study into Ex-works Transport
1986 Arthur Young Ministry of Defence Consultancy assistance with implementation of
vehicle studies
1986 Coopers & Lybrand Associates Ministry of Defence Study in establishing the Royal Dockyards as a 682
Ltd Government Owned PLC
1986 Coopers & Lybrand Associates Foreign Office Audit of FCO travel centre
Ltd
1986 Arthur Young Department for Social Services HCHS Projects—General Support
1986 Arthur Young Department for Social Services Support for management budgeting project at
Southmead, North Tees and Basingstoke and
evaluation of progress of implementation
1986 Arthur Young Department for Social Services Office Technology Projects
1986 Touche Ross & Co. Department for Social Services Study of Payment Systems in the NHS
1986 Deloitte Haskins and Sells Department for Social Services Support for management budgeting project at
Southmead, North Tees and Basingstoke and
evaluation of progress of implementation
1986 Ernst and Whinney Department for Social Services FA/FB Support
1986 Ernst and Whinney Department for Social Services Health Building Division
1986 Coopers & Lybrand Associates Northern Ireland Office Market research on Blood Transfusion Services
Ltd
1986 Deloitte Haskins and Sells Northern Ireland Office To review the information and management
needs of the Department of the Environment
(Northern Ireland) Works Service
1986 Peat, Marwick, Mitchell Northern Ireland Office Commercial potential for an irradiation facility in
Northern Ireland
1986 Price Waterhouse Associates Northern Ireland Office Financial appraisals for the Industrial
Development Board (four studies)
1986 Price Waterhouse Associates Northern Ireland Office Assistance with vetting of contractors accounts
  Appendix 2: Detailed Selection of Consultancy Assignments... 

regarding appointment to select list

1986 Touche Ross & Co. Northern Ireland Office Development of computer audit capability in
DHSS
307

(continued)
Table A.3 (continued)
308 

Date awarded Company Organisation Nature of assignment

1986 Touche Ross & Co. Northern Ireland Office A review of the Standard Capital Grant Scheme
1986 Peat, Marwick, McLintock Inland Revenue The development of financial costing and
modelling systems
1986 Peat, Marwick, McLintock Inland Revenue Financial management techniques and on clerical
work measurement in tax offices
1986 Peat, Marwick, McLintock Customs and Excise A study of computer terminal strategy
1986 Peat, Marwick, McLintock Customs and Excise A study of communications network strategy
1986 Peat, Marwick, McLintock Customs and Excise A study on the potential use of certain
commercial accounting packages
1987 Deloitte Haskins and Sells Gwynedd Health Authority Financial position of health authority
1987 Arthur Young Ministry of Defence Study into Vacant Married Quarters and Disposals
1987 Arthur Young Ministry of Defence Review of Ex-Works Transport
1987 Deloitte Haskins and Sells Ministry of Defence Study into the Functions and Activities of the
Stores and Clothing Development
Establishments
1987 Deloitte Haskins and Sells Ministry of Defence Study into Asset Management in the Chief of
Fleet Support Area
1987 Deloitte Haskins and Sells Ministry of Defence Consultancy Assistance for IT Effectiveness and IT
Technical Audits
1987 Deloitte Haskins and Sells Ministry of Defence Study into Spares Procurement for the Master
General of the Ordnance and the Quartermaster
General
1987 Deloitte Haskins and Sells Ministry of Defence Study into Spares Procurement for Director
General of Supplies and Transport (Naval)
1987 Price Waterhouse Associates Ministry of Defence Resource Management in United Kingdom Land
Appendix 2: Detailed Selection of Consultancy Assignments...

Forces
1987 Price Waterhouse Associates Ministry of Defence Business Systems Support to Subships at
Devonport
1987 Touche Ross & Co. Ministry of Defence DGDA Efficiency Audit—Cash Management Study
1987 Touche Ross & Co. Ministry of Defence Commercialisation of the Royal Dockyards
1987 Arthur Young Ministry of Defence Implementation Support for the Fleet
Maintenance and Repair Organisation’s
Management Accounting System
1987 Peat, Marwick, McLintock Ministry of Defence Computer consultancy to validate ten-year plan
for computing needs at RMSC Shrivenham
1987 Peat, Marwick, McLintock Ministry of Defence Consultancy Support to IT Strategy Unit
1987 Price Waterhouse Associates Ministry of Defence Study into computerisation of handling Civilian
Travel Claims
1987 Peat, Marwick, Mitchell Cabinet Office Review of the preparation and production of
inspection reports
1987 Deloitte Haskins and Sells Cabinet Office Financial management advice and assistance to
the University Grants Committee
1987 Coopers & Lybrand Associates Department for the Environment Assistance to the IT Committee and the Project
Ltd Services Project Board
1987 Peat, Marwick, McLintock Department for the Environment Study for computer aided design
1987 Price Waterhouse Associates Department for the Environment Management Training at Responding to Climate
Change
1987 Price Waterhouse Associates Department for the Environment Tyne and Wear Urban Development
Corporation—headed consortium for Inter-
Disciplinary Study
1988 Price Waterhouse Associates Additional staff needed to administer community
charge
1989 Coopers & Lybrand Associates British Railways Board Coopers & Lybrand recommended that British Rail
Ltd should simplify its organisation and decentralise
on business lines. An Organisation for Quality
(OfQ) team was established to lead the initiative
  Appendix 2: Detailed Selection of Consultancy Assignments... 
309
Table A.4  Detailed selection of state consultancy assignments by data processing generation
310 

Date awarded Company Organisation Nature of assignment

1980 Logica Ltd Department of Health and Location of Social Security work
Social Security
1984 Logica Ltd Department for Employment Sizing study for Departmental Staff Records Computer System
1984 Computer Sciences Department for Social Services Local office project. Computer application in local offices
Company Ltd
1984 Logica Ltd Department for Social Services Programming support for personnel statistics. (Establishments
Division). To evaluate the computer aspects of the feasibility
of introducing an electronic radiology department
1983 ICL Ltd HM Treasury Information Processing Architecture
1983 ICL Ltd HM Treasury Package ‘X’—Conversion for Micros
1984 Logica Ltd Department for Social Services Housing Benefit Review
1984 Logica Ltd Department for Social Services Feasibility study and development of plan/strategy for an
integrated telecom network
1984 Computer Sciences Department for Social Services Audit of local Office Project
Company Ltd
1984 Logica Ltd Department for Trade and High Speed Network
Industry
1984 Logica Ltd HM Treasury Study of Interface Equipment for Communications
Environment Generator
1984 Logica Ltd HM Treasury Interdepartmental Electronic Mail Study
1984 ICL Ltd HM Treasury Project Heineken
1984 Logica Ltd HM Treasury Quick Application Methodology
1986 CMG Ltd Paymaster General Study on use of customer help desk in Computer Operations
Section
1986 ICL Ltd Paymaster General Consultation on computer mainframe installation
Appendix 2: Detailed Selection of Consultancy Assignments...

1986 Logica Ltd Paymaster General Assistance with implementation of personnel data system
1986 Logica Ltd HM Treasury Study on text distribution in Government
1986 Logica Ltd HM Treasury Investigation of the use of SSADM for distributed systems
1986 Computer Sciences HM Treasury Feasibility of installing digital systems design methodology in
Company Ltd Government
1986 Logica Ltd HM Treasury Application of knowledge based systems techniques to audit
trail analysis and Database security
1986 ICL Ltd HM Treasury Study on aspects of MUST
1986 Computer Sciences Ministry of Agriculture Design of new data processing system for Agricultural Census:
Company Ltd
1986 Computer Sciences Department for Social Services Strategy Security
Company Ltd
1986 Computer Sciences Department for Social Services Review of Terminal Replacement and Enquiry Service (TRES)
Company Ltd
1986 Computer Sciences Department for Social Services Data dictionary
Company Ltd
1986 Computer Sciences Department for Social Services Departmental Integrated Project Support Environment (DIPSE)
Company Ltd
1986 Computer Sciences Department for Social Services Strategy Database Administration
Company Ltd
1986 ICL Ltd Department for Social Services Departmental Integrated Project Support Environment (DIPSE)
1986 ICL Ltd Department for Social Services Technical Architecture
1986 ICL Ltd Department for Social Services National Unemployment Benefit System (NUBS)—Software
support.
1986 ICL Ltd Department for Social Services National Unemployment Benefit System (NUBS)—
Communications timers.
1986 Logica Ltd Department for Social Services PPA Systems Sizing & Pilot Trials Evaluation
Telecommunications
1986 Logica Ltd Department for Social Services HCHS Projects—Facilities & Hammersmith Hospital
1987 Computer Sciences Ministry of Defence Study of computing requirements of Royal Aircraft
Company Ltd Establishment
1987 Computer Sciences Ministry of Defence Study into Army Supply Computer Systems
Company Ltd
  Appendix 2: Detailed Selection of Consultancy Assignments... 

1987 Computer Sciences Ministry of Defence Advice on replacement of Royal Aircraft Establishment
Company Ltd Management Information System

(continued)
311
Table A.4 (continued)
312 

Date awarded Company Organisation Nature of assignment

1987 Computer Sciences Ministry of Defence Consultancy requirement for Management and Technical
Company Ltd advice for Corporate HQ Office Technology System
1987 Computer Sciences Ministry of Defence Provision of Consultancy Services for Corporate HQ Office
Company Ltd Technology System
1987 Logica Ltd Ministry of Defence Study into replacement communications system for Navy
Suppliers
1987 Logica Ltd Ministry of Defence Consultancy support for Training Army Commanders
(Simulation)
1987 LOGSYS Ltd Ministry of Defence Systems design study into Royal Signals and Radar
Establishment Personal Information Systems
1987 CMG Ltd Cabinet Office Development of a new Administrative Computer System for
Her Majesty’s Inspectorate
1987 Computer Sciences Cabinet Office Consultancy requirement for Management and Technical
Company Ltd advice for Corporate HQ Office Technology System
1987 Computer Sciences Cabinet Office Provision of Consultancy Services for Corporate HQ Office
Company Ltd Technology System
1987 Logica Ltd Cabinet Office Study into replacement communications system for Navy
Suppliers
1987 Logica Ltd Cabinet Office Consultancy support for Training Army Commanders
(Simulation)
1987 LOGSYS Ltd Cabinet Office Systems design study into Royal Signals and Radar
Establishment Personal Information Systems
Appendix 2: Detailed Selection of Consultancy Assignments...
 Bibliography

Primary Sources
Manuscripts and Archives

Below are listed the key manuscripts and archives consulted during the writ-
ing of this book. Only sources directly referred to in the substantive text that
have contributed to the assignments in the databases or have more broadly
helped generate an understanding of the nature of the issues under consider-
ation are included below. Given the difficulties encountered when finding
management consultancy–related archive material—namely because it has
not been an obvious topic for archivists to file—included here are descriptions
and dates of the sources used.

Bank of England Archive, City of London

5A 26/1 Final McKinsey study report (c.1970)

ADM 38/93 Press cuttings of McKinsey assignment (1968–1970)
E 4/67 “Management consultants in the Bank,” internal paper (1968)
OV 21/29 McKinsey study cartoons (1968)

© The Author(s) 2019 313

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3
314 Bibliography

Bodleian Library, Oxford

Callaghan, James papers

Box 105 Lecture on the CPRS and special advisers (1978)
Box 131 Kirby and special advisers (c. 1978)
Castle, Barbara papers
MS. Castle 264 McKinsey report for British Transport Docks
Board – correspondence (1967)
MS. Castle 265 McKinsey report for British Transport Docks
Board (1967)
Cripps, Stafford papers
Box 43 Papers from the Board of Trade (c.1945–1950)
Box 44 Anne Shaw Consulting Organisation publications
(1943–1947)
Macmillan, Harold papers
MS. Macmillan dep. 383 Anglo-American Council on Productivity papers
(1952).
MS. Eng c. 2194 Sir Philip Rogers papers. Rogers talk at McKinsey
& Co. dinner (c. 1975)
Wilson papers
MS. Wilson c. 767 Correspondence with Senator William Benton
(c.1964–1979)
MS. Wilson c. 768 Balogh’s Apotheosis of the Dilettante (c. 1962–1965)
MS. Wilson c. 769 “March of the Whitehall economists” (c. 1965)
MS. Wilson c. 1594 Correspondence on the use of management
consultants (c. 1967)
MS. Wilson c. 1597 On the use of special advisers (c.1975)

Bradford University Archive, Bradford

Barbara Castle diaries Notes resulting in published diaries, additional

material not in diaries included.

Churchill Archives Centre, Churchill College, Cambridge.

MCLN 2/2 Lyndall Urwick paper on management (c.1948)

MISC 84/1 Sir John Herbecq papers (c.1950–1981)
THCR 1/11/7 f62 “1983 Manifesto Draft” (1983)
  Bibliography  315

Conservative Party Archive, Bodleian Library, Oxford

Joseph, Keith papers

KJ 15/1 Setting up the CPRS (c. 1970)
KJ 15/2 Notes on the authority of government (1975)
KJ 23/1 Contact with academics (1975)
KJ 23/2 Outside helpers (c.1970–1975)
KJ 23/3 Outside experts (c. 1976–1977)
KJ 29/1 Royal Commission on the NHS (1975)
KJ 29/3 Notes on Social Security (1976)
KJ 29/4 Pamphlet on incomes policy (1976)
KJ 29/5 Philips Rogers comments McKinsey’s NHS work (1976)

London School of Economics, Holborn, London

ABEL-SMITH/8/16 Brian Abel-Smith papers on the NHS (1965–1973)

ABEL-SMITH/8/20 Brian Abel-Smith notes on the NHS (1970–1976)
HD9/712 “Modernisation in the cotton spinning industry” (1947)

McKinsey & Company archive, Boston

Oral histories
Langstaff, Harry, April 27–28, 1986
Morrison, Roger, September 18, 1986
Parker, Hugh, April 4, 1986
Strage, Henry, May 20, 1987

Management Consultancies Association archive, Endex Archives,

Ipswich

Boxes 13–107 Private collection

Manchester People’s History Museum, Manchester.

Hart papers
HART 10/04 Notes on American management consultants debate (1968)
HART 12/03 Industrial Policy Committee recommends management
consultancy use (1976)
316 Bibliography

HART 13/09 National Enterprise Board papers (1976)

Heffer papers
ESH 3/19 Papers on industrial relations and PA Consultants’ report
(1974)
Labour History Archive and Study Centre Pamphlet Collection
Box 279 Pamphlets on industrial issues (1930–1995)
Box 280 Pamphlets on industrial issues (1930–1995)
Box 281 Pamphlets on industrial issues (1930–1995)
Labour Party Research Department Memoranda
RDM 1966/36 Managerial power and industrial democracy (1966)
RDM 1966/37 Issues arising from the Fulton Committee (1966)
RDM 1971/58 Paper on Labour and the public sector (1971)
RDM 1971/145 Report on the British steel industry (1971)
RDM 1975/154 Report on the future of British steel (1975)
RDM 1975/163 Paper on a state management consultancy service (1975)
RDM 1976/431 Productivity report by the Industrial Policy Committee
(1976)
RDM 1976/716 Paper on “After Fulton” (1976)
RDM 1976/775 Paper on special advisers (1976)
RDM 1977/947 Evidence to Royal Commission on the NHS (1977)

National Archives of Ireland, Dublin.

2005/151/333 Government Departments Management Consultancy

Assignments (1975)
28/3/73 Management Consultancy Assignments in Government
Departments (1973)
2005/147/321 Garda Siochana Management Consultants project (1972)
2006/132/245 Garda Siochana Management Consultants project
(1972–1976)

National Archives of Scotland, Edinburgh.

SOE 5/66 Review by Arthur Andersen and Company of Scottish Office

Computer Services (1976–1980)

National Archives, The, Kew, London

AB 57/027 McKinsey Atomic Energy Authority report (1962)

ADM 282/16 Consultants and advisers to Admiralty (1954)
  Bibliography  317

AN 18/1013 Privatisation: McKinsey report, ‘Building a commercial

organisation for Railtrack: recommendations to the
Board’
AN 124/195 McKinsey British Rail reorganisation (1971)
AN 174/1196 Training programme in collaboration with Messrs.
Urwick, Orr & Partners Limited and North Eastern
Region (1960–65)
BA 1/60 Fulton Committee reports (1968)
BA 1/72 Fulton Committee notes (1966–1968)
BA 22/660 Civil Service Department: Payment of fees to outside
consultants (1971–1973)
BN 13/165 National Health Service Reorganisation (1970)
BN 13/167 Membership of the Management Study (1972)
BN 13/194 Sir Clifford Jarrett memos on reorganisation (1970)
BN 13/317 Long term Social Security planning: operational strategy
study and costed options (1975–1978)
BN 82/205 Operational Strategy Committee: Advice and Information
Sub-Group; consideration of research (1980–1981)
BN136/1 Management of Local Office Project (1985)
BS 2/508 PA and Royal Commission on the Press (1974)
BS 6/3277 Management Consultancy; NHS Merrison Commission
(1977)
BS 6/3511 McKinsey NHS Commission discussion (1978)
CAB 52/7 Defence Regulations Sub-Committee (1938–1939)
CAB 128/35/51 Conclusions of a Meeting of Cabinet, September 21
(1961)
CAB 128/57/8 BCG motorcycle study – Cabinet decision (1975)
CAB 128/63/18 Kirby Manufacturing cabinet discussions based on PA
study (1968–1969)
CAB 128/63/18 Kirby Manufacturing cabinet discussions based on PA
study (1968–1969)
CAB 128/65/19 Kirby Manufacturing cabinet discussions based on PA
study (1968–1969)
CAB 129/111 Modernisation of Britain—to use management consultants
(1962)
CAB 129/115 BOAC and various consultant appointments (1963)
CAB 129/158/19 NHS reorganisation Dispersal review (1971)
CAB 129/158/24 CPRS recommend using consultants (1971)
CAB 129/164/4 NHS reorganisation White Paper (1972)
CAB 129/166/27 McKinsey study of British Steel Corporation for DTI
(1972)
CAB 129/186/9 McKinsey local government and computer privacy study
(1975)
318 Bibliography

CAB 129/198/24 Kirby Manufacturing cabinet discussions based on PA

study (1968–1969)
CAB 129/193 Memo on “IMF Negotiations” (1976)
CAB 129/199/13 Draft White Paper on Nationalised Industries—
recommends using consultants (78)
CAB 129/201/6 Kirby Manufacturing cabinet discussions based on PA
report (1968–69)
CAB 129/201/7 Kirby Manufacturing cabinet discussions based on PA
study (1968–69)
CAB 129/215/3 Cabinet paper on “Public Expenditure: Objectives for
1982 Survey” (1982)
CAB 129/215/15 “Civil service numbers after 1984” (1982)
CO 1022/314–316 Reports on the reorganisation of Government
administration in Singapore by Urwick, Orr &
Partners (1952–1954)
DEFE 68/8 “Ammunition Production Organisation Study” by
Urwick, Orr & Partners (1970)
FCO 21/1278 “Study by Boston Consulting Group on the future of
Japan” (1974)
FCO 40/410 McKinsey Report on strengthening the machinery of
government of Hong Kong: includes summary of report
(1973)
FG 2/254 NEDO: Use of private companies on assignments for
NEDO: Management Consultants Association (1965)
FG 2/835 National Computing Centre Working Party:
membership, agendas, minutes and papers
(1967–1969)
HN 1/15 Arrangements for setting up the Central Computer
Agency (1972)
HN 1/22 Report on development of computers in government:
forecast for next ten years (1969–1971)
HN 1/29 Review of objectives and functions of the Central
Computer Agency (1974–1975)
HN 1/30 Exchange of computer staff between Civil Service and
the private sector (1968–1980)
HO 213/1595 Naturalisation history (1970)
HO 245/1577 McKinsey BBC 1960s study and follow-on discussion
(1975)
  Bibliography  319

LAB 10/2759 Encouraging small firms to make use of Management

Consultants: notes and papers (1965–1966)
LAB 107/77 National Economic Development Office: Register of
Management Consultants (1968–1969)
LAB 28/16/25 Consultants advice to Royal Commission on Trade
Unions and Employer’s Associations (1969)
MAF 331/45 Use of management consultants by government
department (1965–1972)
MEPO 2/10852 Changes in the organisation of the Metropolitan Police
including merger of Commissioner’s and Receiver’s
Offices as a result of report by PA Management
Consultants Ltd. (1968–1974)
MH 137/427 Health: management consultants’ work for minister
(1953)
MH 137/428 Health: management consultants’ work for minister
(1960)
MH 159/383 McKinsey DHSS organisation review (1972)
MH 166/536 PA assignments in NHS trusts (1967–1976)
PIN 42/118 “Social Security Operations Strategy Working Group.”
Memo: Mike Patterson to Dan Brereton, DHSS,
October 13, 1980.
PREM 13/2550 Government procurement practices: enquiry by
management consultants on behalf of Conservative
Party (1968–1969)
PREM 16/491 Meriden papers and the motorcycle industry (1975)
T 224/1292 Ministry of Technology: establishment of a National
Computing Centre (1965–1966)
T 224/1418 Ministry of Technology: establishment of a national
computing centre (1966–1967)
T 224/2045 Proposed consultancy grants Scheme (1969)
T 326/1040 McKinsey Bank of England study and Parliamentary
issues (1968–1970)
T 374/97 Central Financial Information System: correspondence
with consultants; computer systems and packages
(1976–1977)
TS 58/869 National Computing Centre: draft Memorandum and
Articles of Association (1966)
320 Bibliography

New York City Municipal Archives

86 B19 hafny/ A housing agenda for New York City—proposals for change / by
Carter F. Bales and Anupam P. Puri. (1974)
B83.11/pbi Program/budget instruction fy 1969–1970. (1970)
B83.95/ciup Cases in urban problems / [submitted to the] Bureau of the
Budget, City of New York, June, 1970. (1970)
B83.96/csidt A computer system for income distribution and tax analysis /
Prepared for N.Y. City Bureau of the Budget. (1972)
B83.96/ctts Changing the tax structure: Prepared for N.Y. City Bureau of the
Budget. (1970)
B83.96/iditc Income distribution and income tax computer runs / Prepared for
N.Y. City Bureau of the Budget. (1971)
B83.96/iLtr Increasing local tax revenue: New York City / Prepared for N.Y. City
Bureau of the Budget. (1970)
B83.96/ima [Issue mapping and analysis.]: Presentation before Bureau of the
Budget / July 24, 1967. (1967)
B83.96/incid Redesigning computer programs for income distribution and tax
analysis program name: INCID / [Prepared for N.Y. City Bureau of
the Budget] (1972)
B83.96/mihcm Middle-income housing computer model / Prepared for N.Y. City
Bureau of the Budget. (1968)
B83.96/proj Redesigning computer programs for income distribution and tax
analysis program name: PROJECT / [Prepared for N.Y. City Bureau
of the Budget. (1972)
B83.96/rcpid Redesigning computer programs for income distribution and tax
analysis (EXPOL). / Prepared for N.Y. City Bureau of the Budget.
(1972)
B83.96/rcpidt Redesigning computer programs for income distribution and tax
analysis (GINI) / Prepared for N.Y. City Bureau of the Budget. (1972)
B83.96/rcpta Redesigning computer programs for income distribution and tax
analysis (UNEMP) / Prepared for N.Y. City Bureau of the Budget.
(1972)
B83.96/rcwas Revising charges for the use of water and sewers / [prepared for
N.Y. City. Bureau of the Budget] (1969)
B83.96/rsep Taxing self-employed professionals / Prepared for N.Y. City Bureau
of the Budget. (1971)
B83.96/sales Redesigning computer programs for income distribution and tax
analysis program name: SALES TAX / Prepared for N.Y. City
Bureau of the Budget. (1972)
B83.96/scmn Strengthening crisis management in New York City: Prepared by
McKinsey & Company for N.Y. City Bureau of the Budget. (1970)
B83.96/tanm Taxation of advertising in the New York City marketplace /
Prepared for N.Y. City Bureau of the Budget. (1971)
B83.96/tauap Taxing auto use and parking / [Prepared for the N.Y. City. Bureau
of the Budget.] (1971)
B83.96/tdpp Training data processing personnel / Prepared for N.Y. City Bureau
of the Budget. (1971)
(continued)
  Bibliography  321

(continued)

B83.96/tL Taxing leaded gasoline. / Prepared for the N.Y. City Bureau of the
Budget. (1971)
B83.96/trgen Redesigning computer programs for income distribution and tax
analysis program name: TRGEN / [Prepared for N.Y. City Bureau
of the Budget. (1972)
B83.96/tsep Taxing self-employed professionals / Prepared for N.Y. City Bureau
of the Budget. (1971)
B83.96/ttnc Taxing tar and nicotine in cigarettes / Prepared for N.Y. City
Bureau of the Budget. (1971)
B83.96/uprdp Urban Planning Research and Demonstration Program: final
report. (1970)
C56.95/ipips Improving personnel information processing systems / Department
of Personnel, New York City. (1972)
E8.95/icp Improving collection productivity: the project team manual:
[report done for the Environmental Protection Administration,
Department of Sanitation, Bureau of Cleaning and Collection].
(1970)
Ed8.95/aef Allocating educational funds to the community school districts,
November, 1970. (1970)
Ed8.96/scdm Strengthening community district management: a pilot study of
District 14, Board of Education, City of New York. (1971)
En8.95/iecpt Establishing collection productivity targets / [report done for the
Environmental Protection Administration, Department of
Sanitation, Bureau of Cleaning and Collection]. (1970)
En8.95/imir Improving management information reporting within the Bureau
of Cleaning and Collection / [for the] Environmental Protection
Administration, the City of New York. (1970)
En8.95/ipb Power brooms / [report done for the Environmental Protection
Administration, Department of Sanitation, Bureau of Cleaning
and Collection]. (1970)
F49.65/bnyv Building New York’s visual media industry for the digital age:
findings and recommendations (2000)
F49.95/do Documentation of present income tax processing system and
organization / [submitted to] Finance Administration, City of
New York. (1970)
F49.95/gu Gearing up to improve income tax processing performance:
[procedures of] Finance Administration, the City of New York. (1970)
F52.96/ifp Increasing the FDNY’s preparedness / Prepared by McKinsey. (2002)
H35.96/hsac Organizing HSA Central / Prepared for N.Y. City. Health Services
Administration. (1970)
H35.96/rhsar Reorganizing HSA’s research and health education functions /
[Prepared for Health Services Administration] (1970)
H36.11/caf Consolidation of administrative functions: [N.Y.C] Health Services
Administration. (1970)
H36.11/cpabr HHC/HSA capital planning and budgeting relationships. (1970)

(continued)
322 Bibliography

(continued)

H36.11/ppb Planning, programming, budgeting [in the] New York City Health

and Hospitals Corporation. (1970)
H36.36/tmpb Transition management progress book. (?)
H36.95/aad Abortion analysis documentation: [memoranda to Commissioner
Robert Derzon and others, Department of Hospitals, New York
City Health and Hospitals Corporation]. (1970)
H36.95/pas Providing abortion services to the poor in New York City:
[memoranda to] New York City Health and Hospitals
Corporation. (1970)
H36.95/pib President’s initial briefing: [facts and figures … summarized as an
aid to the President of the New York City Health and Hospitals
Corporation]. (1970)
H36.95/su Starting up the New York City Health & Hospitals Corporation. (1970)
H36.95/su Starting up the New York City Health & Hospitals Corporation. (1970)
H84.95/howr The housing of welfare recipients: opportunities for improvement/
[by Carol Ganz]. (1971)
H84.95/rfpd Rehabilitation financing program descriptions/prepared for the
New York City Housing and Development Administration. (1970)
H84.96/arh Assisting New York City’s renter households: prepared by McKinsey
& Company, Inc. for N.Y. City Housing and Development
Administration. (1971)
H84.96/nrcp The City of New York’s new rent control program: 1970 / Prepared for
New York City Housing and Development Administration. (1971)
H84.96/pehs A profile of the existing housing stock: discussion draft / Prepared
for the New York City. (?)
H84.96/rcp Rent control program: results of rent increases as of November 1,
1970 / Prepared for the New York City Housing and Development
Administration. (1970)
H84.96/soord Systems overview of New York City’s rent determination system /
[for] Housing and Development Administration, City of
New York. (1970)
H85.95/mihim Middle-income housing issue map: [research based on Housing
and Redevelopment Board data]. (1968)
M19/apgh Attacking the problem of ghetto housing in New York City: a
suggested strategy. / Presentation to Board of Directors, N.Y
Urban Coalition. (1969)
M19/ygha You gotta have art! Profile of Great investment for New York
State. (1997)
M21 hchme/ Harlem-East Harlem Model Cities plan. (1969)
M45.55/ppc New York City productivity program charts / [developed by
McKinsey & Company, Inc., to accompany Deputy Mayor’s
productivity program materials?]. (1959)
M45.69/ho New York City Department of Hospitals: Management Survey,
Volume 1—Organisation in Central Administration (1951)
M45.69WE/ri Recommendations for simplifying and measuring work of the social
investigator: a report / prepared by McKinsey & Company. (1951)

(continued)
  Bibliography  323

(continued)

M45.96/snygfs Sustaining New York’s and the US’ global financial services

leadership / a report prepared by McKinsey & Co. for N.Y. City
Mayor Michael R. Bloomberg and U.S. Senator Charles
E. Schumer. (2007)
M72.96/cbcdc Central Brooklyn Model Cities Community Development
Corporation: certificate of incorporation and bylaws / prepared
for N.Y. City Model Cities Administration. / (1970)
M72.96/cbmc Building effective manpower training in Central Brooklyn Model
Cities / Prepared for N.Y.C. Model Cities Administration. (1969)
M72.96/cbmc Creating an effective group practice program in Central Brooklyn
Model Cities / Prepared for N.Y. City. Model Cities
Administration. (1969)
M72.96/cbmca Program details for ambulance decentralization: Central Brooklyn
Model Cities / Prepared for N.Y City Model Cities Administration.
(1969)
M72.96/cbmcL Central Brooklyn Model Cities: loan program / Prepared for Model
Cities Administration. (?)
M72.96/mtdb Manpower training and development in Central Brooklyn Model
Cities / [Prepared for N.Y. City Model Cities Administration.] (1969)
M72.96/nymca New York Model Cities Administration: its problems and
opportunities / (1970)
M72.96/nymcao Organization of the Model Cities Administration / (1970)
M72.96/sbcdc South Bronx Model Cities Community Development Corporation:
certificate of incorporation and bylaws / Prepared for N.Y. City
Model Cities Administration. (1970)
M83.96/gtia A guide to issue analysis / Prepared for N.Y. City Bureau of the
Budget. (1968)
P75.96/iepr Improving NYPD emergency preparedness and response.: Prepared
by McKinsey & Company for the N.Y. City Police Department.
(2002)
S C73G75/ A study of cash, investment and debt management / prepared by
cidmps McKinsey & Company, Inc. (1960)
S C73G75/ptw Planning the work of the Commission: [a series of “photostatic
copies of visual aids used in preliminary oral presentation” / by
McKinsey & Company, Inc. (1959)
S G74.65/msr Study to analyse salary levels paid to New York State employees as
they relate to salary levels paid by private employers for
comparable work / [conducted by] McKinsey & Company, Inc. (1961)
S T24C3/icsd The impact of coterminal service districts … / [9-part report
submitted by McKinsey and Co., with Commission’s own staff;
“none of the material reflect the views of the Commission”]. (1974)

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324 Bibliography

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MSS. 126/TG/938/M/3 A printed report by McKinsey & Co sent to all

members of the TUC Economic Policy Committee
(1976)
MSS. 148/UCW/6/13/19/12 MCA report on ‘Reducing the cost of local
government’ (1961)
MSS. 178/30 Papers of Sir Jack Scamp—Motor Industry Joint
Labour Council inquiries (1965–1968)
MSS. 178/48 Papers of Sir Jack Scamp—various correspondence
(1968)
MSS. 200/C/3/C1/3/1 Anglo-American Council on Productivity
membership lists; misc. correspondence and papers
on survey of BPC by Urwick Orr and Partners,
management consultants (1948–1952)
MSS. 200/F/3/T3/25/1 Industrial Management. Business Consultants,
enquiries (1946–1948)
MSS. 200/F/3/T3/25/6 British Institute of Management, Consultants’
Committee (1948–1950)
MSS. 200/F/3/T3/27/1 Government Committee on Industrial Productivity
(1947–1949)
MSS. 296/REG/352.15 National Whitley Council for the Civil Service—
Use of management consultants on certain aspects
of Civil Service work (1965–1967)
MSS. 335/LG/M/1 P.A. Management Consultants Limited ‘Report on
the cost of Local Government Reform, Cheshire
County Council.’ (1970)
MSS. 365/BSC/47 Work measured incentive schemes for British Steel
Corporation, including study by PA Management
Consultants Limited (1975–1977)
MSS. 89P/404 Employment of business consultants in the Post
Office joint working group to function in parallel
with the McKinsey Inquiry. (1966–1967)
MSS. 89P/410 Employment of business consultants in the Post
Office joint working group to function in parallel
with the McKinsey Inquiry—report included
(1966–1967)
MSS. 89P/443 Employment of business consultants in the Post
Office: joint working group to function in parallel
with the McKinsey Inquiry: progress reports and
information paper (1967–1968)
MSS.154/3/DH/37 Richard Crossman papers regarding a meeting with
E.W. Towler, Chairman, United Oxford Hospitals,
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hospital provision in Oxford (1968–1970)
  Bibliography  325

Interviews and Correspondence

Profiles of individuals contacted are in Appendix 1: Key Characters by

Chapter. All interviews and correspondence were conducted by the author.
Full text of the interviews and correspondence are available on request from
the author.

4th Baron Avebury, correspondence from February 15 to February 27, 2011.

Anonymous, interview with author, London, August 1, 2011.
Anonymous, interview with author, London, October 30, 2014.
Astall, Lis, interview with author in Institute of Directors, Pall Mall, March
9, 2016.
Barber, Sir Michael, telephone interview, April 17, 2015.
Benton, Rich, telephone interview, September 29, 2014.
Birt, Lord John, interview in House of Lords, May 11, 2015.
Burgess, Keith, interview in Sloane Square, London on March 9, 2011.
Butler, David, correspondence and telephone interview from February 15,
2011, to April 1, 2011.
Copisarow, Sir Alcon, interview at Athenaeum Club, London on February 16,
2011, and correspondence between November 1, 2010, and June 29, 2015.
Cox, Sir George, interview at Bull Hotel, Hertfordshire on March 2, 2011.
Donaldson, Hamish, correspondence from March 3, 2011, to April 4, 2011.
Doyle, Bernard, telephone interview on February 16, 2011.
Forrington, Vic, correspondence from March 3 to March 30, 2011.
Giachardi, David, telephone interview on March 9, 2011.
Graham, Antony, correspondence from February 15 to February 20, 2011.
Goold, Michael, telephone interview on May 1, 2011.
Guinness, Sir John, interview at Brooks’s Club, London on January 19, 2011.
Hedley, Barry, interview at Gonville and Caius College, University of
Cambridge on March 18, 2011.
Hickey, Stephen, interview in Wimbledon, London, February 27, 2014.
Ingham, Sir Bernard, correspondence between February 1 and February 16,
2011.
Kaufman, Sir Gerald, interview at House of Commons on March 8, 2011.
Kaye, David, interviews at Landmark Hotel, Marylebone, London on November
21, 2011, and Royal London Homeopathic Hospital on February 14, 2013.
Major, Sir John, conversation at Churchill College, University of Cambridge
on November 26, 2010.
O’Donnell, Lord Gus, conversation in Bloomsbury, London, February 18,
2015, and correspondence from August 28 to August 31, 2015.
326 Bibliography

Otway, Mark, interview at Institute of Directors, Pall Mall, London, March

18, 2014.
Owen, Lord David, interview in Mayfair, London, December 12, 2013.
Stanley, Martin, conversation with author in Institute of Directors, Pall Mall,
September 17, 2015.
Walters, Peter, interview with author, BP Chairman’s Office, Mayfair,
November 10, 2011.
Watmore, Ian, telephone interview on February 12, 2014.
Wilson, Lord Richard, interview at C. Hoare & Co. Bank, March 6, 2014.
 Reports, Publications, and Journals

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Anglo American Council on Productivity. Various. 1948–1952.
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Number 7. 1989.
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Consultants. HMSO. London, 1994.
Booz Allen Hamilton. An integrated Service: The Reorganisation of Health and Personal
Social Services in Northern Ireland. HMSO. London, 1972.
British Broadcasting Corporation. Whitehall and Beyond: Three conversations with
Norman Hunt. BBC. London, 1964.
Cabinet Office. Government ICT strategy: smarter, cheaper, greener. HMSO. London,
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© The Author(s) 2019 327

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328  Reports, Publications, and Journals

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guide. DHSS. London, 1982a.
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Sunningdale Seminar December 1982 Report. DHSS. London, 1982b.
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Department of Health. Departmental Report. The Stationery Office. London, 1997.
Department of Social Security. Agency Study Report. HMSO. London, 1989.
Efficiency Unit. The Government’s use of external consultants: An Efficiency Unit scru-
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HM Treasury. Management in Government. HMSO. London, 1983.
HM Treasury. O&M Bulletin. 1966–1970.
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House of Commons Committee of Public Accounts. Central government’s use of con-
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House of Commons Committee of Public Accounts. Twenty-fourth Report:
Department of Social Security Operational Strategy. HMSO. London, 1989.
House of Commons Health Committee. The use of management consultants by the
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   Reports, Publications, and Journals  329

Institute for Fiscal Studies. A Survey of Public Spending in the UK. IFS. London, 2009.
Institute of Management Consultants. President’s Statement and Report and Accounts.
IMC. London, 1988.
King Edward’s Hospital Fund for London and the Institute of Hospital Administrators.
The shape of hospital management in 1980?: the report of a Joint Working Party set up
by the King’s Fund and the Institute of Hospital Administrators. London, 1967.
Labour Party. Annual Conference Report. Labour Party. London, 1976.
Management Consultancies Association. Comparing consulting in the UK public and pri-
vate sectors: Part of the MCA’s 2010 Industry Research Programme. MCA. London, 2010.
Management Consultancies Association. The Definitive Guide to the UK Consulting
Industry 2009: Trends from 2008 and Outlook for 2009. Management Consultancies
Association. London, 2009.
Management Consultancies Association. The definitive guide to UK Consulting Industry
Statistics 2012: Consolidation and growth in challenging times. MCA. London, 2012.
Management Consultancies Association. The UK Consulting Industry 2008: Trends
from 2007 and Outlook for 2008. MCA. London, 2008.
Management Consultants (Consultancies) Association. Annual Reports. 1964–2007.
Manchester Textile Council. Modernisation in the Cotton Spinning Industry.
Manchester, 1947.
McKinsey & Co. Achieving World Class Productivity in the NHS 2009/10–2013/14:
Detailing the Size of the Opportunity. Department of Health. 2009.
McKinsey & Company, Inc. Towards Better Health Care: Management in the Health
Boards. Vols 1–4, 1971.
Ministry of Health and Scottish Home and Health Department. Report of the committee
of enquiry into the cost of the National Health Service. HMSO. London, 1956.
Ministry of Health and Scottish Home and Health Departments. Report of the Committee
on Senior Nursing Staff Structure (The Salmon Report). HMSO. London, 1966.
Ministry of Health. First Report of the Joint Working Party on the Organisation of
Medical Work in Hospitals (The Cogwheel Report). HMSO. London, 1967.
National Audit Office. Report by the Comptroller and Auditor General: Administrative
Computing in Government Departments. HMSO. London, 1984a.
National Audit Office. Report by the Comptroller and Auditor General, Department of
Social Security: Operational Strategy. House of Commons. London, 1989.
National Audit Office. Building capability in the Senior Civil Service to meet today’s
challenges: Report by the Comptroller and Auditor General. NAO. London, 2013a.
National Audit Office. Central government’s use of consultants: Market analysis.
NAO. London, 2006a.
National Audit Office. Central government’s use of consultants: Methodology.
NAO. London, 2006b.
National Audit Office. Central government’s use of consultants: Report by the Comptroller
and Auditor General. HMSO. London, 2006c.
National Audit Office. House of Commons 266 Session 2003–4. Criminal Records
Bureau: Delivering Safer Recruitment: Report by the Comptroller and Auditor
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330  Reports, Publications, and Journals

National Audit Office. Healthcare across the UK: A comparison of the NHS in England,
Scotland, Wales and Northern Ireland. HMSO. London, 2012.
National Audit Office. Information and Communications Technology in government
Landscape Review. HMSO. London, 2010a.
National Audit Office. Measuring the Performance of Government Departments: Report
by the Comptroller and Auditor General. NAO. London, 2001.
National Audit Office. Private Finance Projects. NAO. London, 2009a.
National Audit Office. Report by the Comptroller and Auditor General: Administrative
Computing in Government Departments. HMSO. London, 1984b.
National Audit Office. The 2013–14 savings reported by the Efficiency and Reform
Group: Report by the Comptroller and Auditor General. NAO. London, 2014a.
National Audit Office. The centre of government: Report by the Comptroller and Auditor
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National Audit Office. The Role of Major Contractors in the Delivery of Public Services.
The Stationery Office. London, 2013b.
National Audit Office. Central government’s use of consultants and interns: Report by the
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National Audit Office. Central Government’s use of Consultants. HMSO. London, 2006d.
National Audit Office. Private Finance Projects. NAO. London, 2009b.
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World Bank. Global Expert Team. Driving Performance through Center of Government
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The Civil Service Vol. 1: Report of the Fulton Committee 1966–68. HMSO. London, 1968a.
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The Director: Journal of the Institute of Directors. IOD publication. Various dates.
The Manager: The Journal of the British Institute of Management. BIM publication.
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The Future of the British Car Industry Report. HMSO. London, 1975.
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Computer Weekly
Computerworld UK
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   Reports, Publications, and Journals  331

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New Statesman
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 Index1

A B
Academia, 16, 251, 256 Balogh, Thomas, 68, 69, 75, 82
Accenture, 3, 151, 176, 209, 210, 219, Banham, John, 113, 116, 130,
238n55, 255, 276 214, 252
Actor-network theory (ANT), 18, 179 Bank of England, 3, 28, 30,
Agar, Jon, 162, 188 34, 57, 86n12, 103–105,
A.I.C. Limited/Inbucon, 61, 156, 159, 107, 135, 155, 272, 313
270, 280–290, 292 Barber, Michael, 47n160, 199, 202,
Aldridge, Rod, 213, 215 221, 224–230, 244n157,
Allen, William, 20, 44n113, 101 246n199, 252
Andersen, Arthur, 3, 31, 149–189, background, 277
205, 219, 232, 234, 250, 252, Prime Minister’s Delivery Unit,
255, 262, 275, 276 221, 224, 226, 229, 230, 252
Archives, 30–38, 89n47, 89n48, Bedaux, Charles Eugène, 19, 52, 53,
94n181, 183, 262, 313–324 56, 57, 88n46, 89n54
Arthur D. Little, 24, 78, 99, 100, 272 background and life, 269
Astall, Lis, 219, 262, 276–277 Bedaux Company, 52, 53, 88n46,
Athenaeum, 36, 105, 159, 252 100, 159
A.T. Kearney, 37 Benn, Tony, 70, 84, 104,
Atos Origin, 210 106, 123, 126, 130,
Audit Commission, 17, 201, 202, 144n133, 204
214, 252 Benton, Rich, 213–215, 217, 277
Automation, 27, 31, 151, 160, 162, 179 Birt, John, 228, 233, 277

 Note: Page numbers followed by ‘n’ refer to notes.

1

© The Author(s) 2019 349

A. E. Weiss, Management Consultancy and the British State,
https://doi.org/10.1007/978-3-319-99876-3
350 Index
Blair, Tony, 3, 10, 13, 199, 201–203,
208, 215, 220–227, 229,
232–234, 244n161
Prime Minister’s Delivery Unit, 3,
199, 202, 221, 224, 225
public sector reform, 3, 31
views on management
consultancy, 223
Board of Trade, 4, 22, 51, 59, 64,
68–70, 78, 83, 84, 126, 271, 278
Booz Allen & Hamilton, 24, 35
Boston Consulting Group (BCG), 24,
35, 99, 100, 106, 107, 123, 129,
130, 176, 199, 206, 233, 271–273
motorcycle study, 317
Bower, Marvin, 100, 104, 113, 114, 264
British Broadcasting Corporation
(BBC), 7, 28, 99, 103, 215, 228,
233, 256, 277
British decline
historiographical accounts of, 2, 10,
19, 29, 50, 52, 53, 108, 109, 166
in popular culture, 57, 243n134
revisionist views of, 2, 9, 10, 261
British Railways, 16, 103, 107, 128,
253, 255
Burgess, Keith, 151, 152, 166, 173,
174, 275
Businessmen’s Team, 77, 78, 123,
229, 273
Business schools, 13, 100, 155
C Cripps, Stafford, 51, 54, 69, 102
Cabinet Office, 10, 16, 121, 177, 224,
228, 229, 231, 271, 276, 277
Callaghan, James, 162, 181, 252
Cameron, David, 20, 229, 252
Capgemini, 159, 176, 214, 227
Capita, 4, 31, 201, 203, 210–218, 220,
242n124, 249, 254–256, 277
Central Policy Review Staff (CPRS),
16, 31, 77, 123, 145n133, 163,
207, 214, 229, 277
Chartered Institute for Public Finance
and Accounting (Cipfa), 213
Citizens’ Charter, 220
Civil service
nature of, 7, 80
relationships with consultants, 2, 37,
50, 71, 72, 79
Civil Service Department (CSD), 17,
37, 48n170, 55, 72, 76, 77,
93n159, 114, 121, 124, 125,
127, 128, 134, 158, 160, 163,
229, 256, 274
Clinton, Bill, 206–208, 220
Clubland, Pall Mall, 36
Computer Sciences Company (CSC),
31, 159, 174, 310–312
Conservative Party, 121, 184, 212, 215,
233, 315
Cooper Brothers & Company, 122,
155, 297
the Operational Strategy, 155
Coopers & Lybrand Associates, 16,
156, 205, 297–307, 309
Copisarow, Alcon, 32, 33, 36,
104–107, 252, 272
gaining clients, 36, 252, 272
joining McKinsey & Company, 272
Cox, George, 65, 80, 82, 270
Craig, David, 20
and Richard Books’ Plundering the
public sector, 20
Criminal Records Bureau (CRB), 215,
216, 255, 256
Crossman, Richard, 68, 75, 112, 126,
127, 129, 243n141
D
Davies, Howard, 214
Davis, Jon, 9, 67
Deliverology
concept, 226
Prime Minister’s Delivery Unit, 226

Deloitte, Haskins & Sells, 153
Deloitte, Robson & Morrow, 153
Department of Economic Affairs
(DEA), 60, 64–66, 70, 275
Department of Health, 4, 133, 136
Department of Health & Social
Security (DHSS), 10, 31, 109,
111, 112, 114, 116, 119–128,
133, 134, 136, 149–152, 158,
165, 168, 169, 171, 173, 176,
178, 182, 184, 186–189,
274–276
Department of Industry, 84, 106, 107,
123, 129, 233, 261, 271, 273
Department of Social Security (DSS),
151, 175, 177, 178, 180, 276
Department of Trade & Industry,
123, 173, 271
E Hickey, Stephen, 176–180, 184, 186,
Edgerton, David
views on declinism, 8, 9
warfare state, 8, 16, 178
Efficiency Unit, 21, 31, 36, 160, 201,
205, 225, 229, 230
Electronic Data Systems (EDS), 175,
176, 188, 214
England, 65, 97, 98, 107, 110, 117,
118, 122, 124, 127, 131–133,
137, 141n78, 273
public sector reform, 108, 261
Ernst & Whinney, 153
Ernst & Young (EY), 24, 272
F Information technology/information
Foucault, Michel, 14, 18
France, 17, 45n131, 75, 250, 263
Fulton Committee
aims and findings, 71, 75, 163
Management Consultancy Group, 67
Fylde, 150, 175, 179
 Index  351
G
G4S, 210
Garrett, John, 71, 75, 270
Geddes, Eric, 51, 52
Germany, 75, 80, 263
Gore, Al, 207, 214
Governmentality, 18
Governmental sphere, 15, 16, 32,
42n84, 67, 126, 127, 201,
250–254, 261, 262, 264, 265n7
H
Harvard Business School, 100, 272
Heath, Ted, 16, 31, 77, 78, 84, 109, 112,
120, 121, 123, 127, 136, 212, 273
Heclo, Hugh, 5, 6, 18
Hedley, Barry, 99, 100, 106, 107, 233,
272–273
Hennessy, Peter, 6–8, 16, 109, 121
189, 276
HM Treasury
general, 21, 231, 270, 275
Organisation & Methods, 49, 71,
80, 162, 163
Hobbes, Thomas, 11, 51
Hong Kong, 36, 105, 252, 272, 318
Hood, Christopher, 10, 13, 15, 248n233
Howe, Geoffrey, 184
Humble, John, 66
I
IBM, 159, 186, 207
ICL, 159, 186
communications technology,
4, 28, 185, 207, 218, 219
Ingham, Bernard, 325
Institute of Management Consultants,
47n150
Ireland, 30, 34, 98, 124, 275, 316
352 Index
J Management, 1, 49–55, 78–82, 97,
Japan, 129, 207
Jenkins, Simon, 13, 202, 223
Joseph, Keith, 59, 112, 113, 120,
125–127, 231, 261
Joyce, Patrick, 12, 179, 260
K 152–156, 164, 207, 210, 211,
Kaufman, Gerald, 68, 129, 271
Kaye, David, 158, 276
Kieser, Alfred, 22, 23, 109, 137
Kipping, Matthias, 17–19, 21, 23, 57,
93n159, 159
Kirby Manufacturing Enterprise, 252
KPMG, 232
L British generation, xi, 30, 50, 56,
Labour Party, 126, 204, 215, 221, 224,
271, 273
Lawson, Nigel, 97, 181
Liberal Democrats, 201, 229
Local government
nature of, 125, 212, 215, 218,
228, 260
relationships with consultants, 4, 33,
65, 201
Logica, 31, 159, 160, 170
London, 7, 29, 52, 53, 99, 100,
103–105, 116, 125, 155, 168,
179, 214, 215, 248n231, 252,
256, 259, 261, 270, 274, 276,
277, 315–319
Lowe, Rodney, 9, 10, 20, 109,
162, 178
M Media, 2, 3, 20, 21, 23, 35, 39n14, 58,
Major, John, 178, 185, 186, 208, 225,
259, 277
views on management consultancy,
21, 201, 202
155, 201, 249, 270
in popular culture, 243n134
Management by Objectives (MbO),
66, 67
Management Consultancies Association
(MCA), 1, 4, 21, 25, 26, 36, 37,
47n150, 55–63, 65, 66, 85, 99,
262, 270, 275, 315
Management consultancy
accountancy generation, xii, 31
American generation, xi, 30, 98,
103, 121, 152, 159, 176, 178,
213, 249, 261
the Big Eight, 152–154
the Big Four, 30, 53, 55–57, 66, 71,
85, 100, 156
59, 79, 152
data processor generation, 27
definitions of, 25–27, 29
earliest origins, 16, 19, 53, 55, 85
expenditure on, 4
literature on, 18
outsourcing generation, 31, 32,
203, 210
relationships with clients, 1, 2, 4,
18, 22, 23, 55, 58, 65, 72, 122,
130, 155, 157, 178, 233, 256
Mann, Michael, 14, 132
Maude, Francis, 230–232
McKenna, Christopher, 13, 18, 19, 24,
25, 30, 51, 100, 122
McKinsey & Company
entry into Britain, 99
hiring staff, 103, 121, 133
views on other consultancies, 3, 134
164–166, 175, 199, 201, 202,
219, 227, 229, 230, 233, 251,
253, 263, 264, 269, 277, 321
Meyjes, Richard, 78, 123, 127, 273

Ministry of Aviation, 5, 8, 64
Ministry of Health, 3, 55, 110, 111,
113, 119, 275
Ministry of Pensions and National
Insurance (MPNI), 167
Ministry of Supply (MoS), 8, 19, 51
Ministry of Technology (MinTech), 70,
83, 106, 271, 272, 275
Mitchell, Timothy, 12, 13
N P.A. Management Consultants, 56, 57,
National Audit Office (NAO), 1, 4, 21,
38, 165, 166, 168, 172, 175, 180,
185, 189, 201, 216, 225, 229
National Economic Development
Council, 60, 64, 66, 106, 272
National Health Service (NHS), 3, 4,
10, 17, 20, 28, 30, 37, 58, 59, 86,
97–137, 172, 173, 179, 181, 185,
204, 207, 214, 220, 223, 233,
250, 253, 255, 259–261, 274
Nationalised industries, 4, 28, 37,
58–60, 64, 83, 84, 107, 123,
158, 162, 253
Newcastle, 150, 167, 168, 172,
174, 179
New Public Management (NPM), 10,
15, 202, 208, 238n52
Next Steps, 202, 205, 233
NHS reorganisation
the Grey Book, 117, 128
overview, 107, 261
Northern Ireland, 98, 107, 109, 110,
117, 131–133, 137, 179, 182
O support for Fulton Committee, 17
O’Donnell, Gus, 199, 230, 232, 234,
235, 248n231, 256, 261
O’Hara, Glen, 8, 10, 20, 30, 60, 67, 68
views on planning, 205
Operational Strategy, 3, 31, 149–189,
234, 250, 253, 255, 260, 262, 276
 Index  353
Oral history, 33, 36, 37, 315
Otton, Geoffrey, 150, 169, 178, 189
Otway, Mark, 174, 178, 184–186, 276
Outsourcing
definitions of, 210
expenditure on, 219
Owen, David, 119, 120, 126–128,
131, 273–274
P
61, 71, 77, 79, 81, 84, 123,
252, 264
Parker, Hugh, 103, 104, 107, 274
Peat, Marwick, Mitchell & Co., 153
relationships with civil servants, 122
Planning, 8, 16, 19, 29, 30, 49–73,
108, 110–112, 116, 119, 120,
158, 159, 165, 170, 172, 180,
205, 216, 250, 252, 255, 261,
269–271, 276
Pocock, J.G.A., 109
three kingdoms, 109, 264
Predominantly, 178
Price Waterhouse Associates, 298,
301–303, 305–309
Prime Minister’s Delivery Unit
(PMDU), 31, 47n160, 199, 202,
203, 209, 220–230, 233, 252,
255, 260, 261, 276
Prime Minister’s Strategy Unit, 223
Private Finance Initiative (PFI), 218, 223
Privatisation, 3, 204, 205, 210, 254
Production Engineering/P-E
Consulting Group, 16, 19, 30,
54, 57, 58, 61, 64, 123, 152, 292
Public Accounts Committee (PAC), 38,
165, 166, 172, 173, 175, 185,
189, 201, 236n9
Public Private Partnerships (PPP), 216,
218, 223, 240n77
Public sector, see State, definitions of
354 Index
R hollowing-out thesis, 13, 109
RAND Corporation, 24, 25
Rationalisation, 18, 20, 51, 52, 62,
108, 230
Reading, 29, 35, 150, 168, 169, 175,
179, 186, 217, 228, 252
Reorganisation
of Atomic Energy Authority, 30
of BBC, 99, 103
of British Railways, 103, 107, 128
of NHS, 30, 98, 107–137, 179,
181, 185, 186, 214, 261, 274
Rhodes, R.A.W., 12–15, 107
hollowed-out thesis, 13, 14,
38n11, 107
Rogers, Philip, 113, 114, 120,
123–125, 128, 274
Rothschild, Victor, 78
Royal Bank of Scotland (RBS), 254
Royal Ordnance Factories, 51, 65, 80,
82, 156
Runciman, David, 11
S 225, 232
Saint-Martin, Denis, 17, 18, 21,
93n159, 263
Sampson, Anthony, 5, 6, 18, 35, 104
views on elite networks, 18
Scandinavia, 250
Scotland, 51, 98, 107, 109–111, 117,
131–133, 137, 179
use of management consultants,
131, 132
Serco, 31, 210, 214, 249
Skinner, Quentin, 11, 12, 255
Skocpol, Theda, 12
State
centralisation, 9, 132, 188, 228,
229, 260
definitions of, 28, 29, 98
geographical boundaries, 9, 11, 13,
14, 30, 133, 137, 179
state power, 2, 11–16, 29, 98, 107,
109, 132, 136, 137, 179, 184,
187, 188, 249
welfare state, 6, 8, 109, 167, 184,
203, 212, 218
Strage, Henry, 97, 113, 116, 124, 125,
128, 135, 274–275
Strategy, 3, 6, 18, 23–26, 82, 100,
104, 130, 151, 156, 157,
164–167, 172–179, 183–189,
206, 216, 228, 234, 249,
273, 276
T
Tata Consultancy Services, 217
Taylor, Frederick Winslow,
52, 53, 207
and Taylorism, 52, 100
Technical class, 81, 178
Thatcher, Margaret, 10, 13, 17, 21,
31, 72, 176, 181, 184, 185,
203–205, 209, 212, 215,
size of the state, 203
views on management consultancy,
17, 21
Theakston, Kevin, 17
Tomlinson, Jim, 7, 8, 54
Touche Ross & Co., 299–308
U
United Kingdom (UK), 2–4, 6–8, 10,
11, 13, 15–17, 19–27, 29–32,
34, 35, 37, 47n150, 50–59,
61–63, 66, 80–82, 84, 85, 98,
99, 101–105, 109, 110, 112,
122, 123, 129, 131–134, 136,
137, 144n133, 149–152, 154,
156, 158, 159, 164, 166, 167,
169, 170, 178, 179, 181, 183,

185, 199, 203, 204, 206–208,
210–212, 218, 219, 221, 222,
228, 249, 250, 253, 260,
262–265, 270, 275–277
United States of America (USA), 10,
18, 23, 24, 58, 99, 100, 122,
170, 206, 207, 269, 276
Americanisation thesis, 58, 170
Cold War, 206, 207
Urwick, Lyndall, 1, 3, 19, 54, 58, 69,
82, 85, 102
Urwick, Orr & Partners, 1, 30, 54, 59,
61, 66, 80, 82, 156, 270
W 136, 220, 222, 223
Wales, 97, 98, 107, 109, 110, 117,
127, 131–133, 137
 Index  355
Watmore, Ian, 22, 177, 178, 184, 210,
232, 276
Webster, Charles, 17, 98, 108,
128, 131
Westminster, 15, 28, 117, 259, 260
Whitehall, 1, 3, 5–11, 15, 68, 70, 77,
104, 124, 150, 160, 177–180,
202, 224, 226, 228, 231, 234,
259, 260
White heat, 105, 106
Wildavsky, Aaron, 5, 6, 18
Williams, F.D.K., 113, 116, 118,
120–122, 128, 133, 134, 275
Wilson, Harold, 17, 24, 30, 50, 60,
67–71, 75–78, 83, 109, 130,
Wilson, Richard, 160, 223–225, 227,
230, 231